DJ ASIA DAILY FOREX OUTLOOK -

Majors
Thu Jul 15 19:35:00 EDT 2010
SINGAPORE (Dow Jones)--Following are expected trading ranges and outlooks for nine major
currency pairs today:

Immediate Range Larger Range

USD/JPY 87.21-88.00 86.96-88.43
EUR/USD 1.2800-1.2955 1.2707-1.3000
AUD/USD 0.8781-0.8848 0.8726-0.8871
NZD/USD 0.7205-0.7301 0.7172-0.7325
GBP/USD 1.5345-1.5471 1.5234-1.5498
USD/CHF 1.0397-1.0512 1.0127-1.0548
USD/CAD 1.0356-1.0442 1.0278-1.0454
EUR/JPY 112.25-113.40 111.83-114.16
EUR/GBP 0.8323-0.8403 0.8312-0.8419

(Ranges are calculated using recent high and lows, information on the placement of option
strikes, and technical analysis - Fibonacci levels, trendlines and moving averages.)

USD/JPY - to consolidate amid broad-based USD weakness (ICE spot dollar index last 82.4 vs
Wednesday's 83.426 settlement) as worries mount over faltering U.S. economic recovery &
expectations increase that Fed will wait until next year before it starts raising interest rates after
U.S. PPI fell a more-than-expected 0.5% in June for third straight month of decline (vs forecast
for 0.2% drop), U.S. industrial production rose only 0.1% in June, Empire State business
conditions index plunged to 5.08 in July from 19.57 in June (vs 18.5 expected), Philadelphia
Fed's manufacturing index fell to 5.1 in July from 8.0 in June (vs forecast for rise to 10.0).
USD/JPY also undermined by Japan exporter sales, lower U.S. Treasury yields, BOJ yesterday
raising its estimate for Japanese growth this year to 2.6% from 1.8%. But USD/JPY losses
tempered by USD demand for import settlements, positions adjustment before Japan long
weekend, latest U.S. weekly jobless claims falling 29,000 (vs 9,000 drop expected) to 429,000,
their lowest level since August 2008; BOJ governor Shirakawa warning yesterday that he's
keeping close eye on yen strength because of risk to Japanese exports. No strong cue for yen
carry trades from Wall Street overnight after U.S. stocks closed mixed (DJIA down 0.07%, S&P
up 0.12%); still, investor fear gauge VIX rose 1% to 25.14. Data focus: 2350 GMT Japan May
tertiary industry index, 0500 GMT July BOJ monthly report, 1230 GMT U.S. June CPI, 1300
GMT U.S. May Treasury international capital data, 1355 GMT University of Michigan July
survey of consumers (preliminary). USD/JPY daily chart mixed as MACD in bullish mode; but
stochastics turned bearish. Support at 87.21 (yesterday's low), then at 87.00-86.96 band (July 7
low-July 1 low); would target psychological round-numbered levels of 86.00, 85.00, then 84.81
(Nov. 27 bottom). Resistance at 88.00 (previous base set Tuesday); breach would expose upside
to 88.43 (yesterday's high), then 89.11-89.15 band (Wednesday's high-Monday's high), 89.42-
89.47 band (June 29 high-June 28 high) and 89.77 (June 25 high).
EUR/USD - to consolidate with bullish bias after hitting 2-month high of 1.2955 yesterday. Pair
underpinned by negative USD sentiment, easing investor concerns over euro zone's sovereign
debt problems after Spanish government's successful auction of EUR3 billion 15-year bonds
yesterday; growing confidence that European banks stress tests set to be published at end of next
week will boost transparency and confirm limited risks to region's financial sector. But
EUR/USD gains tempered by positions adjustment before weekend. Data focus: 0900 GMT
eurozone May trade balance. EUR/USD daily chart positive-biased as MACD & stochastics
bullish, although latter at overbought, suggesting sideways or higher EUR/USD trading near-
term. Resistance at 1.2955 (yesterday's high); breach would expose upside to psychological
1.3000, then 1.3093 (May 10 high) and 1.3342 (April 30 reaction high). Support at 1.2800
(hourly chart); breach would expose downside to 1.2707 (yesterday's low), then 1.2680
(Wednesday's low), 1.2520 (Tuesday's low) and 1.2478 (July 2 & July 6 lows).

AUD/USD - to consolidate. Pair underpinned by Aussie-USD yield gap, negative USD

sentiment, firmer commodity prices (CRB spot index closed up 2.01 yesterday at 264.21),
spillover from EUR strength. But AUD/USD gains tempered by worries over slowing economic
growth in China & further Chinese monetary tightening which would crimp demand for Aussie
exports; positions adjustment before weekend. AUD/USD daily chart mixed as MACD bullish,
but stochastics turning bearish at overbought. Support at 0.8781 (hourly chart), then at 0.8726
(yesterday's low); breach would expose downside to 0.8680 (Tuesday's low), then 0.8619 (July 8
low, matching 55-day moving average) and 0.8510 (previous cap set July 2). Resistance at
0.8848 (yesterday's high), then at 0.8871 (Wednesday's 2-month high, near 100-day moving
average); breach would reinstate near-term positive bias, exposing upside to 0.8972 (200-day
moving average), then psychological 0.9000 and 0.9026 (May 13 high).

NZD/USD - to consolidate with bullish bias after hitting 2-month high of 0.7301 yesterday. Pair
underpinned by Kiwi-USD yield gap, negative USD sentiment, firmer commodity prices,
spillover from EUR strength. But NZD/USD gains tempered by lower-than-expected NZ 2Q CPI
of +0.3% (vs +0.6% consensus), denting expectations that RBNZ will further hike its policy rate
25 bps at its July review; positions adjustment before weekend. NZD/USD daily chart positive-
biased as MACD & stochastics bullish, although latter at overbought, suggesting sideways or
higher NZD/USD trading near-term. Resistance at 0.7301 (yesterday's high); breach would target
0.7325 (April 30 reaction high), then 0.7441 (Jan. 14 reaction high). Support at 0.7205 (hourly
chart), then at 0.7172 (yesterday's low) and 0.7156 (Wednesday's low); breach would temper
near-term positive outlook, exposing downside to 0.7073 (Tuesday's low), then 0.7053
(Monday's low), 0.7019 (July 8 low, matching 100-day moving average) and 0.6974 (previous
cap set July 6, near 55-day moving average).

GBP/USD - to consolidate with bullish bias after hitting 11-week high of 1.5471 yesterday. Pair
supported by weaker USD sentiment, spillover from EUR strength. But GBP/USD gains capped
by lingering concerns over negative impact of fiscal tightening on UK economy; positions
adjustment before weekend. GBP/USD daily chart positive-biased as MACD & stochastics
bullish, although latter at overbought, suggesting sideways or higher GBP/USD trading near-
term. Resistance at 1.5471 (yesterday's high); breach would target 1.5498 (April 26 reaction
high), then 1.5523 (April 15 reaction high), 1.5583 (200-day moving average) and 1.5816 (Feb.
17 reaction high). Support at 1.5345 (hourly chart); breach would expose downside to 1.5234
(yesterday's low), then 1.5086 (previous cap set Monday), 1.4962 (Tuesday's low) and 1.4946
(Monday's low).

USD/CHF - to consolidate with bearish bias after hitting 6-month low of 1.0397 yesterday. Pair
weighed by negative USD sentiment; but losses contained by plunge in ZEW-Credit Suisse
indicator of economic sentiment to 12-month low of 2.2 in July from 17.5 in June, positions
adjustment before weekend. Daily chart negative-biased as MACD & stochastics bearish,
although latter at oversold, suggesting sideways or lower USD/CHF trading near-term. Support
at 1.0397 (yesterday's low); breach would expose downside to 1.0127 (Jan. 11 reaction low),
then parity, 0.9974 (Dec. 2 reaction low) and 0.9914 (Nov. 26 trough). Resistance at 1.0512
(hourly chart), then at 1.0548 (yesterday's high); breach would expose upside to 1.0617
(Wednesday's high), then 1.0645 (Tuesday's high), 1.0675 (July 5 & Monday's highs) and 1.0697
(July 2 high).

USD/CAD - to range-trade. Pair underpinned by softer oil prices (Nymex crude settled down 42
cents yesterday at $76.62/bbl); worries over contagion from weaker U.S. economy on Canada's
growth. But USD/CAD upside limited by negative USD sentiment, expectations that BOC will
raise its key interest rate 25 bps to 0.75% Tuesday. Data focus: 1230 GMT Canada June
composite leading indicators. USD/CAD daily chart mixed as MACD bearish, but stochastics
turning bullish at oversold. Support at 1.0356 (hourly chart); breach would expose downside to
1.0278 (yesterday's low), then 1.0273-1.0269 band (Tuesday's low-June 23 low), 1.0178 (June
22 low) and 1.0133 (June 21 reaction low). Resistance at 1.0442 (yesterday's high), then at
1.0454 (July 9 high); breach would expose upside to 1.0484 (July 8 high), then 1.0552 (previous
base set July 5) and 1.0606 (July 7 high).

EUR/JPY - to consolidate with bullish bias after hitting 4-week high of 113.40 yesterday. Cross
supported by easing investor concerns over euro zone's sovereign debt problems; but gains
tempered by positions adjustment before weekend. Daily chart positive-biased as MACD &
stochastics in bullish mode, although latter at overbought. Resistance at 113.40 (yesterday's high,
matching June 21 reaction high); breach would expose upside to 114.16 (June 3 reaction high),
then 114.40 (May 21 reaction high) and 115.49 (May 18 reaction high). Support at 112.25
(hourly chart), then at 111.83 (yesterday's low); breach would expose downside to 110.68
(Tuesday's low), then 109.29 (July 7 low), 109.12 (July 6 low) and 107.47 (July 1 low).

EUR/GBP - to range-trade. Daily chart mixed as MACD bullish, but stochastics bearish at
overbought. Support at 0.8323 (yesterday's low), then at 0.8317-0.8312 band (Wednesday's low-
Tuesday's low); breach would expose downside to 0.8288 (July 7 low), then 0.8262 (July 6 low),
0.8249 (July 5 low) and 0.8215 (July 2 low). Resistance at 0.8403 (yesterday's high), then at
0.8419 (Monday's high, near previous base set May 6); breach would expose upside to
psychological 0.8500, then 0.8547 (May 28 high).
Disclaimer
(This article is general financial information, not personalized investment advice, as it does not
consider the unique circumstances affecting an individual reader's decision to buy or sell a
specific security. Dow Jones does not warrant the accuracy, completeness or timeliness of the
information in this article, and any errors will not be made the basis for any claim against Dow
Jones. The author does not invest in the instruments or markets cited in this article.)