DJ ASIA DAILY FOREX OUTLOOK -

Majors
Mon Jul 26 19:37:00 EDT 2010
SINGAPORE (Dow Jones)--Following are expected trading ranges and outlooks for nine major
currency pairs today:

Immediate Range Larger Range

USD/JPY 86.71-87.39 86.25-87.78
EUR/USD 1.2874-1.3005 1.2791-1.3028
AUD/USD 0.8953-0.9035 0.8926-0.9078
NZD/USD 0.7276-0.7353 0.7242-0.7441
GBP/USD 1.5407-1.5520 1.5347-1.5554
USD/CHF 1.0456-1.0563 1.0405-1.0617
USD/CAD 1.0299-1.0343 1.0273-1.0385
EUR/JPY 112.19-113.47 111.55-114.16
EUR/GBP 0.8315-0.8397 0.8288-0.8466

(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 broadly weaker USD undertone (ICE spot dollar index last 82.08
vs Friday's 82.464 settlement) as concerns grow over weakening U.S. economic recovery: Dallas
Fed July business activity index plunged to minus 21.0 from June's minus 4.0, Chicago Fed
national activity index slipoped to minus 0.63 in June from May's +0.31, bolstering expectations
Fed will keep interest rates at record lows near zero well into 2011. USD/JPY also undermined
by Japan exporter sales; but losses tempered by USD demand for import settlements, fear of
Japan official jawboning against further JPY strength, JPY-funded carry trades amid lower risk
aversion (VIX fear gauge off 3.15% at 22.73) as U.S. stocks gained overnight (DJIA up 0.97%)
on continued enthusiasm over 2Q earnings, stronger-than-expected U.S. June new home sales
(up 23.6% vs +3.7% forecast). Data focus: 2350 GMT Japan June corporate service price index,
1300 GMT U.S. May S&P/Case-Shiller home price index, 1400 GMT U.S. July consumer
confidence index, 1500 GMT June Chicago Fed Midwest manufacturing index. USD/JPY daily
chart mixed as MACD in bullish mode, but stochastics turning bearish. Support at 86.80-86.71
band (yesterday's low-Friday's low); breach would expose downside to 86.32-86.25 band
(Thursday's low-July 16 low), then psychological round-numbered levels of 86.00, 85.00, and
84.81 (Nov. 27 bottom). Resistance at 87.39 (hourly chart), then at 87.78 (yesterday's high);
breach would target 88.00 (previous base set July 13), then 88.43 (July 15 high), 89.11-89.15
band (July 14 high-July 12 high) and 89.42-89.47 band (June 29 high-June 28 high).

EUR/USD - to consolidate with positive bias. Pair underpinned by weak USD sentiment, EUR
demand for long-EUR carry trades on decreased risk aversion; easing investor concerns over
euro-zone sovereign debt & financial system; recent upbeat euro-zone & German economic data.
Data focus: 0610 GMT German August GfK consumer climate survey, 0800 GMT June
monetary developments (M3) in euro area. EUR/USD daily positive-biased as MACD &
stochastics bullish, although latter near overbought, suggesting sideways or higher EUR/USD
trading near-term. Resistance at 1.3005 (yesterday's high); breach would target 1.3028 (July 20
high), then 1.3093 (May 10 high), 1.3124 (38.2% Fibonacci correction of 1.5144-1.1875 Nov.
25-June 7 decline) and 1.3342 (April 30 reaction high). Support at 1.2874 (yesterday's low);
breach would temper near-term positive outlook, exposing downside to 1.2791 (Friday's low),
then 1.2730 (Wednesday's low), 1.2707 (July 15 low) and 1.2680 (July 14 low).

AUD/USD - to consolidate with bullish bias. Pair underpinned by weak USD sentiment, AUD
demand for long-AUD carry trades as risk appetite rises; speculation RBA may hike rates next
month. But AUD/USD gains tempered by caution before tomorrow's Australian 2Q CPI data. No
strong cue from commodities as CRB spot index closed essentially flat overnight at 266.66.
AUD/USD daily chart positive-biased as MACD & stochastics bullish, although latter at
overbought, suggesting sideways or higher AUD/USD trading near-term. Resistance at 0.9035
(yesterday's high); breach would expose upside to 0.9078 (May 10 reaction high), then 0.9247
(projected top of ascending channel formed with July 6 low of 0.8315 and July 8 high of 0.8791).
Support at 0.8953 (hourly chart), then at 0.8926 (yesterday's low) and 0.8894 (Friday's low);
breach would expose downside to 0.8840 (base of channel), then 0.8735 (Thursday's low) and
0.8665 (July 20 low).

NZD/USD - to consolidate with bullish bias. Pair underpinned by weak USD sentiment, NZD
demand for long-NZD carry trades on subdued risk aversion, speculation RBNZ may hike rates
at its review on Thursday. 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 0.7353 (yesterday's high); breach would expose upside to 0.7441 (Jan. 14 reaction
high), then 0.7521 (Nov. 16, 2009 reaction high) and 0.7634 (Oct. 21, 2009 top). Support at
0.7276 (hourly chart), then at 0.7242 (yesterday's low) and 0.7222 (Friday's low); breach would
expose downside to 0.7092 (Thursday's low), then 0.7041 (July 20 low) and 0.7027 (July 19 low,
near 100-day moving average).

GBP/USD - to consolidate with bullish bias. Pair underpinned by broad-based USD weakness,
positive investor risk sentiment; lingering effect from Friday's strong UK 2Q GDP growth data.
But GBP/USD gains tempered by concerns over negative impact of fiscal consolidation on UK
economy; Hometrack's survey showing UK house prices fell 0.1% on month in July for first drop
since May 2009. Data focus: 1000 GMT UK July CBI distributive trades survey. GBP/USD
daily chart positive-biased as MACD & stochastics in bullish mode. Resistance at 1.5520
(yesterday's high, roughly matching April 15 reaction high); breach would target 1.5554 (200-
day moving average), then 1.5816 (Feb. 17 reaction high). Support at 1.5407 (yesterday's low);
breach would expose downside to 1.5347 (hourly chart), then 1.5251 (Friday's low), 1.5123
(Wednesday's low) and 1.5002 (100-day moving average).

USD/CHF - to range-trade. Pair undermined by broadly weak USD sentiment; but downside
limited by short-CHF carry trades on receding risk aversion. Daily chart still positive-biased as
MACD & stochastics in bullish mode, although inside-day-range pattern completed yesterday.
Support at 1.0456 (yesterday's low); breach would expose downside to 1.0405 (Friday's low),
then 1.0391 (Thursday's low), 1.0363 (Jan. 25 reaction low) and 1.0127 (Jan. 11 reaction low).
Resistance at 1.0556-1.0563 band (yesterday's high-Friday's high); breach would expose upside
to 1.0617 (July 14 high), then 1.0645 (July 13 high, near 200-day moving average), 1.0675 (July
12 reaction high) and 1.0697 (July 2 high).

USD/CAD - to trade with downward bias. Pair undermined by dissipating risk aversion, weak
global USD, expectations BOC to continue increasing interest rates gradually in coming months.
No strong cue from oil prices as Nymex crude settled flat yesterday at $78.98/bbl. USD/CAD
daily chart negative-biased as MACD & stochastics in bearish mode; bearish parabolic stop-and-
reverse signal hit at 1.0330 yesterday. Support at 1.0299 (yesterday's low); breach would target
1.0278-1.0273 band (July 15 low-July 13 low), then 1.0178 (June 22 low), 1.0133 (June 21
reaction low) and 1.0105 (May 13 reaction low). Resistance at 1.0343 (hourly chart), then at
1.0385 (yesterday's high); breach would expose upside to 1.0434 (Friday's high), then 1.0503
(Thursday's high), 1.0586 (July 20 high) and 1.0606 (July 7 high).

EUR/JPY - to consolidate with upward bias after hitting 7-week high of 113.47 yesterday,
supported by benign investor risk sentiment. Daily chart positive-biased as MACD & stochastics
in bullish mode; bullish parabolic stop-and-reverse signal hit at 113.27 yesterday. Resistance at
113.47 (yesterday's high); breach would expose upside to 114.16 (June 3 reaction high), then
114.40 (May 21 reaction high) and 115.49 (May 18 high). Support at 112.19 (yesterday's low);
breach would temper near-term positive outlook, exposing downside to 111.55 (Friday's low),
then 110.02 (Thursday's 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 in bearish mode;
inside-day-range pattern completed yesterday. Resistance at 0.8397 (yesterday's high); breach
would expose upside to 0.8466 (Thursday's high), then 0.8478 (Wednesday's high), 0.8531 (July
19 high) and 0.8547 (May 28 high). Support at 0.8322-0.8315 band (yesterday's low-Friday's
low); breach would target 0.8288 (July 7 low), then 0.8262 (July 6 low), 0.8215 (July 2 low) and
0.8163 (July 1 low).

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.)