The dollar had a choppy day of trading on Monday, as the Standard and Poor's downgrading of 3 major US investment banks triggered long liquidation in carry trades. Dollar fell sharply against the yen, less against the Swiss, but rallied against the weak pound. Expect more consolidation today.
Euro/dollar Euro/dollar trimmed most of its early losses on Monday to close with only smalllosses. Consolidation should continue today as well.
Immediate support now comes at 1.552.. The next levels are 1.5495 and 1.5460. Below 1.5415, distant support is seen at 1.5287 from a pivot low.
The resistance at 1.5590 should hold on the day. If it doesn't, then look for a rally to as high as 1.5650. Distant resistance is perched at 1.5817.
Oscillators are mixed.
NEAR-TERM: Mixed MEDIUM-TERM: Mixed to slightly bullish LONG-TERM: Bullish
Dollar/yen Dollar/yen slumped sharply on aggressive sales of carry trades. Following some early bounce, expect another decline.
Initial support is pegged at 104.10. Below 103.40 from a 50-point pivot, which targets 102.90 and 103.90, there is distant support at 102.73.
Immediate resistance is at 104.50 from a 50-point pivot, which targets 104.00 and 105.00. Distant resistance is at 105.60 from a 50-point pivot that targets 105.10 and 106.10.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias MEDIUM-TERM: Bullish LONG-TERM: Bearish
Sterling/dollar Sterling/dollar fell sharply on Monday on news that suggests that recession is close. The pound trimmed losses, so after some recovery today, the decline should resume.
Initial resistance is at 1.9710. Above it, there is further resistance at 1.9760, 1.9795 and 1.9880.
Support is first seen at 1.9600. Below 1.9550, cable has support at 1.9470.
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