India Forex Advisors / Market Commentary / 05_Aug

By IBTimes Staff Reporter | August 05 2010 4:41 AM

The Euro eased back after solid strength over the previous two trading days and the market fell back on the stronger US data. July EU PMI Services were revised to 55.8 vs. 56 previously. The pullback did not threaten the uptrend with support seen at 1.3125 and 1.2980. The market has turned cautiously bullish on the EUR. (EURUSD– 1.3148)

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The Sterling fell back below 1.5900 as the market took profit in New York and ahead of the Bank of England Policy meeting today. July Halifax Prices increased 0.6% vs. -0.3%. EUR/GBP stalled its decent with the pair bouncing back to 0.8300. The charts of Gbp seems to be highly overbought and ripe for a major correction. Stay cautious.( GBPUSD 1.5886)

The Japanese Yen traded at year lows below Y85.40 but was bought back up on the strong US data to finish the day at Y86.10 level. The market is still bearish on the outlook with Y84.80 (Support) bears first target.(USDJPY 86.10) Neutral

The AUDUSD was able to set fresh month highs in spite of the USD strength as June Trade Balance figures set a record at 3.5bn vs. 1.6bn previously. AUD/JPY led the market higher in the US session but AUD/USD topped out at 0.9183 resistances. The AUD is currently trading at 0.9145 levels. Now the support comes close to 0.8900 area. (AUDUSD - 0.9145). Neutral to Bullish

Gold is currently trading at 1194 levels and does not seem to be very bullish now. Most likely target could be 1120 dollars in case we see 2-3 of closing below 1190-1200 dollar . Please note that risk will remain heavily on the downside as 1266.5 resistance holds, and we'd expect another decline sooner or later. Shorts near 1194 -1200 is expected.(Gold— 1194)

Dollar index is currently trading at 80.94 levels. The current decline from 88.70 is treated as a correction to medium term rally from 74.19. We'd stay bearish with 83.45 resistance intact and extend the current fall to extend towards 80.04, which is close to 80 psychological level as well as 61.8% retracement at 79.80. Hence, the greenback would continue to be soft for a while in general. Nevertheless, downside should be contained there to conclude the correction and bring rebound. Break of 83.45 will indicate that dollar index has bottomed and should then bring strong rebound towards 85.09/86.42 resistance zone. (Dollar Index– 80.94) Neutral