Analysis

Daily Market Commentary

The dollar surged on Tuesday
The dollar surged on Tuesday in part because Treasury Secretary Paulson paid lip service for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised. Alternating up and down days make it difficult to stay long on a position. The medium-term outlook remains bearish for the dollar, but the Fed fear of inflation could translate in a more sustained upmove. Euro/dollar Euro/dollar fell to a 12-day low this my model went short. The medium-term
The oil and gold prices went up and the dollar eventually tumbled on Monday
The oil and gold prices went up and the dollar eventually tumbled on Monday. The medium-term outlook remains negative, but the dollar failed to make an upmove, so the downside is favored. Euro/dollar Euro/dollar rallied broadly but this my model went long. Both the short-term and the medium-term outlooks are bullish. Immediate resistance is now at 1.5940. The next levels is 1.5970 and a pivot high follows at 1.6036. Above 1.6055, distant resistance is at 1.6135. Initial support is at 1.5880.
The dollar edged higher on Friday in quiet trading
The dollar edged higher on Friday in quiet trading. We need to see if there will be another recovery in the equity indices and a decline in the oil price. The medium-term outlook remains negative, but the dollar should attempt another upmove today. Euro/dollar Euro/dollar consolidated on Friday but this my model went short. The short-term outlook is slightly bearish, but the medium-term outlook remains bullish. Immediate resistance is still at 1.5890. The next levels are 1.5910 and 1.5970. A
The dollar pad its bounce on Thursday
A further recovery in the equity indices, a declining oil price (now for three days) and a falsely strong US hosing report helped the dollar pad its bounce on Thursday. But the medium-term outlook remains negative, and the dollar may be ending its recovery today. Euro/dollar Euro/dollar reversed early losses on Thursday and this my model went long. The short-term outlook is slightly bullish, while the medium-term outlook remains bullish. Immediate resistance is at 1.5890. The next levels are
Bouncing equity markets
Bouncing equity markets, a declining oil price (OK, only for two days) and a decent industrial production report helped the dollar recover on Wednesday. The medium-term outlook remains negative, but expect the dollar to attempt another recovery today. Keep an eye on the US housing data (but can’t expect a good report) and on the Philly Fed. Euro/dollar Euro/dollar fell on Wednesday and this prompted my model to go short. The short-term outlook is slightly bearish, but the medium-term outlook
The dollar trimmed losses following a sharp drop in crude oil
The dollar trimmed losses following a sharp drop in crude oil, but these pullbacks don’t usually hold, so expect some Nigerian rebels or Iranian bellicose statements to boost energy prices soon. Fannie Mae and Freddie Mac remain a major problem, as the financial system is dire straights. Expect the dollar to attempt a recovery today, but the medium-term outlook remains bearish. And if you doubt that, take a look at the US indices. The US economic agenda includes the CPI and industrial
The market was not all that impressed
The market was not all that impressed about the Treasury and Federal Reserve’s plans to support Fannie Mae and Freddie Mac and the dollar’s early recovery was either trimmed or reversed. Expect some selling pressure to persist, and keep an eye on the shaky US indices. Also, there is a set of important US data, which includes retails sales and PPI. Euro/dollar Euro/dollar fell from a 2 ½-month but recovered some of its losses and there is no bearish reversal on the chart. My model remains long.
Sinking stocks hurt the dollar on Friday
The confluence of geopolitical and systemic risk, and sinking stocks hurt the dollar on Friday. On Sunday, the Treasury and Federal Reserve produced sweeping steps to support Fannie Mae and Freddie Mac and attempt to avoid a potential meltdown in global financial markets. The Fed said both companies could access its discount window for emergency cash and the Treasury said that it would temporarily increase its line of credit to them, as well as purchase equity in them, if necessary. Expect a
The dollar was all over the place on Thursday
The dollar was all over the place on Thursday, down versus the euro and the commodity currencies, but up against the yen and pound. The US currency should attempt another decline today and the US trade deficit should not be a market mover. Euro/dollar Euro/dollar rallied on Thursday to a one-week high. My model remains long and I expect a choppy upmove. Immediate resistance is at 1.5820. Above the pivot high at 1.5908, euro/dollar had distant resistance at 1.6020. Initial support is at 1.5665.
The dollar's attempts to pad its gains were unsuccessful on Wednesday
The dollar’s attempts to pad its gains were unsuccessful on Wednesday, as Iran’s test of missiles triggered a knee-jerk reaction. The US currency sank broadly and my model went short. Firing nine missiles doesn’t change a thing, but the US equity indices sinking into recession do. Thus, choppy trading should continue in FX. Euro/dollar Euro/dollar rallied on Wednesday, but remained stuck in an inside range. My model is now long, but with the market alternating up and down days, I’m not sure
The dollar unexpectedly marched higher on Tuesday
The dollar unexpectedly marched higher on Tuesday after the oil prices fell again and the US stock indices managed to advance. There was little impact from news that the index of pending home re-sales fell 4.7 percent in June following an upwardly revised 7.1 percent gain in April. It’s summer time and the market is very unclear – but the dollar should attempt to pad its gains on Wednesday. Euro/dollar Euro/dollar fell on Tuesday, but was stuck in an inside range. My model remains short, which
The dollar made aggressively reversed early gains on Monday
The dollar made aggressively reversed early gains on Monday to reflect the plunge of Freddie Mac and Fannie Mae on NYSE on concern these two leading mortgage-finance companies may need to raise more capital; Lehman Brothers analysts had said Fannie Mae will add $46 billion of capital and Freddie Mac $29 billion. With the stocks confirming a bear market, the dollar should make another choppy decline – but the accent is on choppy! Euro/dollar Euro/dollar reversed from a 1 ½-week low and closed
The dollar managed to recover aggressively on Friday
The dollar managed to recover aggressively on Friday and thus to end the week higher, but this only shows the nervousness of the market, as the reasons for strength were simply not there. The ECB met the market expectations and tightened borrowing costs by 25 bps to 4.25 percent, but then President Trichet signaled the ECB wasn't planning another rate rise, also as expected. Non-farm payrolls fell in June roughly as expected, but the revisions of the previous two months were horrendous. But
The dollar suffered mostly against the euro and its convenient sub
The dollar suffered mostly against the euro and its convenient sub, the franc, but made little progress versus the yen and pound. Today will be a very difficult day, which would suggest at face value more dollar weakness. But both the 25-bp rate hike by the ECB and a weak non-farm payrolls are priced in, and we are facing a short trading day before the Independence Day holiday. Bon chance! Euro/dollar The euro/dollar rallied to a 2 ½-month high on Wednesday, ahead of the expected European
The dollar suffered mostly against the euro and its convenient sub
The dollar suffered mostly against the euro and its convenient sub, the franc, but made little progress versus the yen and pound. Today will be a very difficult day, which would suggest at face value more dollar weakness. But both the 25-bp rate hike by the ECB and a weak non-farm payrolls are priced in, and we are facing a short trading day before the Independence Day holiday. Bon chance! Euro/dollar The euro/dollar rallied to a 2 ½-month high on Wednesday, ahead of the expected European
The dollar was all over the place on Tuesday
The dollar was all over the place on Tuesday, but when the dust settled, it made little progress. Expect further choppy trading today as well. Euro/dollar The euro/dollar closed slightly higher on Tuesday, as the market lacks direction. I don’t expect much clarity today either, but with the European Central Bank expected to hike rates on Thursday, the bias should be on the upside. Immediate resistance is at 1.5842. Above 1.5930, euro/dollar sees additional resistance at 1.6020. Initial support
The dollar encountered very choppy trading conditions on Monday
The dollar encountered very choppy trading conditions on Monday, amid last minute position adjustment for the end of the quarter, and managed to reverse early losses. The US currency looks primed for a rally on the first day of the second half of the year. Keep an eye on the US manufacturing ISM report – it may have some short-lived impact. Euro/dollar The euro/dollar made the expected upmove only in early trading and then fell from a three-week low to close down on Monday. It looks like a
The dollar should remain under pressure today
The US currency accelerated its decline versus the majors, particularly against the yen, as some of the carry trade was liquidated. The dollar should remain under pressure today as well. Euro/dollar The euro/dollar surged further on Friday. The upside is still favored. Immediate resistance is at 1.5842. Above 1.5930, euro/dollar sees additional resistance at 1.6020. Initial support is at 1.5720. The next good level is at 1.5685. Below 1.5630, further support remains at 1.5575. Oscillators are
The dollar should remain under pressure today
With the promise of higher rates later this year off the table, one of the few supports for the dollar was brusquely removed and the US currency tumbled against the majors. But the commodity currencies fell on the day as the appetite for risk dissipated. Take some of your cues from the spending/income and the University of Michigan reports, but with oil up and the stock markets down, the dollar should remain under pressure today. Euro/dollar The euro/dollar surged to its highest level since
The dollar spiked wildly both ways
Additional evidence that the US economy is in trouble, this time from the volatile durable goods orders and the new homes sales, did not affect the dollar. But the FOMC meeting did; the combination of worries about inflation but no rate hike proved to be a hot mix for volatility, which exploded for a few minutes. The dollar spiked wildly both ways, and when the dust settled, the US currency was lower. The selling pressure should continue today. Euro/dollar The euro/dollar reversed losses and
The dollar plummeted on Tuesday on news
The dollar plummeted on Tuesday on news the Conference Board's consumer confidence index collapsed to a 16-year low in June, but it reduced losses on the day. The FOMC will leave rates unchanged on Wednesday, and probably for the rest of the year, but look for what they have to say. Keep an eye on the volatile durable goods orders and the new homes sales; the data should be bad but it’s probably discounted and the dollar should attempt to bounce. Euro/dollar The euro/dollar has been
The dollar rallied on Monday, as expected
The dollar rallied on Monday, as expected. Miserable Eurozone data provided good reason to sell the euro, but dollar/yen rallied back to the 107.95 pivot. The US currency should attempt to advance today as well, but the overall direction and feeling did not get any clearer. Euro/dollar The euro/dollar fell sharply on Monday to surrender all of the Friday’s gains, and my model went short. Sideways to lower trading is likely today. Immediate support is seen at 1.5470. Below 1.5430, the next
The dollar fell across the board on Friday
The dollar fell across the board on Friday and even dollar/yen moved (slightly) away from the 107.95 pivot. The US currency should attempt to bounce today though, as the direction and feeling are not clear at all. Euro/dollar The euro/dollar rallied sharply on Friday, and my model remains long. Sideways to lower trading is likely today. Immediate support is seen between 1.5573 and 1.5565. The next good levels lie at 1.5510 and 1.5545. Immediate resistance is at 1.5650. Above 1.5727,
The dollar surged against he franc after the SNB left rates unchanged
The dollar surged against he franc after the SNB left rates unchanged, surged against the pound following the ridiculously strong UK retail sales report, but continued to consolidate against the yen around the 107.95 pivot. The US currency should consolidate on Friday, but take your cues from the triple witching hour and oil price. Euro/dollar The euro/dollar struggled higher on Thursday as well, and my model is long, but closed slightly lower. Sideways to lower trading is likely today.
The dollar ended higher versus the European currencies on Wednesday
The dollar ended higher versus the European currencies on Wednesday, but continued to consolidate against the yen around the 107.95 pivot. The franc made most of the gains ahead of the SBC meeting, but the odds of a minute rate tightening are only 50/50. Watch out for the UK retail sales as well. Other things being equal, the US currency should consolidate further today. Euro/dollar The euro/dollar struggled higher on Wednesday as well, and my model went long. Sideways to higher trading is
A set of bad US data didn't hurt the dollar all that much
A set of bad US data didn’t hurt the dollar all that much and the market looks confused. It ended slightly lower against the euro, the franc, and the yen but higher against the pound. Cable crashed on Tuesday after the open letter from the Governor to the Chancellor in response to UK rise in inflation to 3.3 percent in May was not as hawkish as expected. This eased concerns that the next move in UK interest rates will be up. With no data on tap on Wednesday, the US currency should consolidate.
The dollar sank versus the European currencies on Monday
The dollar sank versus the European currencies on Monday on relief that the G8 meeting went quietly out of the way, but dollar/yen advanced. More of the same is likely today, but take some cues from the US PPI, housing and industrial production reports. Euro/dollar The euro/dollar should recover further today and it won’t take much to turn my model long. Immediate resistance now comes at 1.5518. Above 1.5570, euro/dollar has strong resistance at 1.5645. Immediate support is seen at 1.5417.
The dollar rallied broadly on Friday
The dollar rallied broadly on Friday as well ahead of the G8 meeting, but late sales in the European currencies avoided the break of significant technical levels. With the G8 meeting out of the way, the US currency should decline first and then attempt to rally again. With the G8 central banks mum on the dollar, the US currency should head lower. There is a chance of a rally in euro/sterling due to a possible M&A. Euro/dollar The euro/dollar recovered from a five-week low on Friday to
The dollar rallied broadly on Thursday
The dollar rallied broadly on Thursday following strong US retail sales and business inventories reports, the InBev bid for Anheuser-Busch, and ahead of the G8 meeting. With the G8 meeting started today, the US currency should remain strong. But take your cues from the US CPI report. Euro/dollar The euro/dollar sank to a one-week low on Thursday and briefly penetrated the support of a trendline rising since February. More weakness is likely and my model remains short.  Immediate support
The dollar surged further on Wednesday
The dollar surged further on Wednesday after Fed Chairman Bernanke pummeled the market with talk about focusing on inflation, which of course suggests higher rates. Again, Wednesday should see residual strength, but the medium term outlook remains negative. Euro/dollar The euro/dollar suffered further losses after forming a bearish reversal formation on the daily chart. My model went short. Only a break below 1.5410 would warrant further weakness. So, immediate support is now seen at 1.5410.
The dollar collapsed on Friday
The dollar collapsed on Friday. Not only that the US unemployment figures were a(n apparent) disaster, but Israel warning to Iraq and EBS threat to hike rates all conspired to boost the oil and destroy the US currency. Monday should see some reprieve, by the outlook is negative. Euro/dollar The euro/dollar exploded higher on Friday and closed above the trendline of its channel declining since May 27. More general strength is likely. Initial resistance is at 1.5817. Above it, euro/dollar
The dollar collapsed on Friday
The dollar collapsed on Friday. Not only that the US unemployment figures were a(n apparent) disaster, but Israel warning to Iraq and EBS threat to hike rates all conspired to boost the oil and destroy the US currency. Monday should see some reprieve, by the outlook is negative. Euro/dollar The euro/dollar exploded higher on Friday and closed above the trendline of its channel declining since May 27. More general strength is likely. Initial resistance is at 1.5817. Above it, euro/dollar
The euro/dollar aggressively reversed from a three-week low
The euro/dollar aggressively reversed from a three-week low after ECB President Trichet signaled a possible rise in euro zone interest rates as early as July. The dollar rallied against the yen, but gave up gains versus the pound and franc. Careful today, as the non-farm payrolls are due. If the ADP is of any significance, the report should not be that weak. Euro/dollar The euro/dollar surged from a three-week low following Trichet’s statement and tested the trendline of its channel declining
The dollar basically consolidated against the majors on Wednesday
The dollar basically consolidated against the majors on Wednesday, a day after Fed Chairman Bernanke acknowledged the falling US currency. Only the pound stumbled on weak UK data. The Loonie and Kiwi sank as well. If the carry trades falter further, the yen should gain, but as of now, the dollar should go higher. Euro/dollar The euro/dollar marked time on Wednesday after plunging a day earlier. It should head lower today, as the medium-term outlook is increasingly negative. The pair has
The dollar has a down day on Friday versus the European currencies
The dollar has a down day on Friday versus the European currencies, but only consolidated against the independent yen. I don’t expect the start of a new direction on the first day of June, so consolidation should prevail. Euro/dollar Euro/dollar held above the support of the 60-day moving average at 1.5518 and rallied on Friday. The upmove failed to trigger a bullish reversal, so consolidation should rule today. Immediate support now comes at 1.5495 and 1.5460. below 1.5415, distant support is
The dollar surged on Thursday
The dollar surged on Thursday despite a large drop in crude oil and gasoline supplies last week, as the Energy Department blamed the change ontemporary unloading delays on the Gulf Coast. Today should see consolidation, but the multitude of US data on month end may create temporary havoc. Be on the lookout for personal income and spending, the Chicago PMI and the University of Michigan survey. Euro/dollar Euro/dollar collaped to a near two-week low on Thursday and slightly pierced the support
The dollar rallied on Wednesday as well versus all majors but cable
The dollar rallied on Wednesday as well versus all majors but cable, in part because of a better than expected durable goods orders report. But the crude oil made an aggressive recovery. The US currency should only consolidate today. Euro/dollar The euro/dollar sank to an over one-week low on Wednesday and my model remains short. Only a break below 1.5600 signals more weakness; if not, the medium-term upmove should resume. Key support is at 1.5600. A close below this level would signal a
The dollar rallied on Tuesday as the crude oil slumped about 2.5%
The dollar rallied on Tuesday as the crude oil slumped about 2.5%, and the upmove was remarkable given the soft US data. The US currency should attempt another upmove today if the oil inventory report doesn’t surprise with a decline. Euro/dollar The euro/dollar had an outside day but sank to a near one-week low and my model went short. Following another decline today, the medium-term upmove should resume. Key support remains at 1.5655. A close below this level would signal a sustained decline
The dollar drifted aimlessly during the Memorial Day weekend
The dollar drifted aimlessly during the Memorial Day weekend. Trading should return to normal today, but probably slowly. Expect an attempt to recover before the dollar turns lower. Euro/dollar The euro/dollar closed virtually unchanged on Friday and Monday, so the positive outlook remains in place. The interim inversed head-and-shoulders remains in place and my model remains long. Following some profit taking, the upmove should resume. Initial resistance is seen at 1.5811. Above 1.5865,
The dollar fell on Friday versus the yen and the franc
The dollar fell on Friday versus the yen and the franc, but only consolidated against the euro and the pound. Given the long weekend, trading should remain nominal. Euro/dollar The euro/dollar closed virtually unchanged on Friday, and the positive outlook is in force. The interim inversed head-and-shoulders remains in place and my model remains long. Following some profit taking, the upmove should resume. Initial resistance is now seen at 1.5811. Above 1.5865, euro/dollar has distant

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