DJ ASIA DAILY FOREX OUTLOOK -

Majors
Thu May 27 19:31:00 EDT 2010
SINGAPORE (Dow Jones)--Following are expected trading ranges and outlooks for nine major
currency pairs today:

Immediate Range Larger Range

USD/JPY 90.26-91.08 89.79-91.88
EUR/USD 1.2201-1.2394 1.2152-1.2559
AUD/USD 0.8400-0.8528 0.8188-0.8637
NZD/USD 0.6762-0.6860 0.6623-0.6876
GBP/USD 1.4410-1.4607 1.4366-1.4638
USD/CHF 1.1481-1.1588 1.1447-1.1655
USD/CAD 1.0401-1.0595 1.0240-1.0718
EUR/JPY 110.40-112.76 109.19-114.05
EUR/GBP 0.8419-0.8510 0.8397-0.8585

(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 with risks skewed higher. Pair underpinned by buying of yen crosses
amid improved risk sentiment (VIX fear gauge eases 15.25% to 29.68), strong Wall Street gains
overnight (DJIA up 2.85%, Nasdaq up 3.73%) as worries over euro zone's sovereign debt crisis
eased after China's FX regulator SAFE denied media reports it's reviewing its euro-denominated
bond holdings, investors brushing aside disappointing U.S. data: 1Q GDP growth revised down
to 3.0% from original report of 3.2% (vs consensus for upward revision to 3.4%), while latest
weekly claims for jobless benefits fell 14,000 (vs forecast for 16,000 decline). USD/JPY also
supported by USD demand for import settlements, higher U.S. Treasury yields. But USD/JPY
gains tempered by Japan exporter sales, positions adjustment before weekend. Data focus: 2330
GMT Japan April household spending, April Nation CPI, May Tokyo CPI, April labour force
survey, 2350 GMT Japan April preliminary retail sales, 1230 GMT U.S. April personal income
& spending, May ISM-NY business conditions index, 1345 GMT U.S. May ISM-Chicago Index,
1355 GMT May University Of Michigan consumer confidence index (final). USD/JPY daily
chart mixed as MACD in bearish mode, stochastics neutral. Resistance at 91.08 (yesterday's
high); breach would expose upside to 91.88 (May 20 high), then 92.15 (May 19 high) and 92.40
(55-day moving average). Support at 90.26 (hourly chart); breach would expose downside to
89.79 (Wednesday's low), then 89.24 (Tuesday's low), 88.98 (May 20 low) and 87.95 (May 6
low).

EUR/USD - to consolidate with risks skewed higher. Pair supported after China expressed
confidence in European bonds; Spain's government agreed to budget cuts, boosting confidence
country's high debt level wouldn't be drag on European economy. But EUR/USD gains tempered
by lingering worries over European debt woes; positions adjustment before weekend. Data focus:
0730 GMT April EuroCOIN indicator of euro-area economic activity, 0810 GMT euro-zone
May retail PMI. EUR/USD daily chart positive-biased as MACD & stochastics turning bullish,
bullish-piercing candlestick completed yesterday. Resistance at 1.2394 (yesterday's high); breach
would expose upside to 1.2559 (Monday's high), then 1.2672 (May 21 high) and 1.2684 (May 13
high). Support at 1.2201 (hourly chart); breach would expose downside to 1.2152-1.2143 band
(yesterday's low-May 19 4-year low), then psychological 1.2000, 1.1823 (Feb. 27, 2006 reaction
low) and 1.1775 (Dec. 30, 2005 reaction low).

AUD/USD - to consolidate with risks skewed higher. Pair underpinned by AUD demand for
long-AUD carry trades on better investor risk appetite, stronger commodity prices (CRB spot
index ended up 4.89 yesterday at 257.72), Australian press speculation government may water-
down its proposed 40% tax on mining profits. But AUD/USD gains tempered by positions
adjustment before weekend. AUD/USD daily chart mixed as MACD bearish, but stochastics
rising from oversold, bullish parabolic stop-and-reverse signal hit at 0.8430 yesterday.
Resistance at 0.8528 (yesterday's high); breach would expose upside to 0.8637 (May 19 high),
then 0.8714 (previous base set May 6) and 0.8789 (May 18 high). Support at 0.8400 (hourly
chart); breach would expose downside to 0.8188 (Wednesday's low), then 0.8065 (Tuesday's 10-
month low) and psychological 0.8000.

NZD/USD - to consolidate with risks skewed higher. Pair underpinned by NZD demand for
long-NZD carry trades on higher risk appetite, stronger commodity prices; strong 8.5% on-
month rise in NZ April residential building consents issued, bolstering expectations RBNZ will
raise policy rate from 2.5% at its June meeting. But NZD/USD gains tempered by positions
adjustment before weekend. NZD/USD daily chart mixed as MACD bearish, but stochastics
turned bullish at oversold. Resistance at 0.6860 (yesterday's high), then at 0.6876 (May 20 high);
breach would expose upside to 0.6913 (previous base set May 17), then 0.7039 (May 18 high).
Support at 0.6762 (hourly chart); breach would expose downside to 0.6623 (yesterday's low),
then 0.6602 (Wednesday's low), 0.6559 (Tuesday's 9-month low) and 0.6470 (July 30, 2009
reaction low).

GBP/USD - to trade higher. Pair supported by improved risk sentiment; but gains tempered by
slump in UK CBI's May retail sales balance to minus 18 from April's +13 (against +12
expected), drop in UK GfK May consumer confidence to minus 18 from minus 16 in April (vs
no change expected), positions adjustment before weekend. GBP/USD daily chart positive-
biased as MACD & stochastics turning bullish, bullish parabolic stop-and-reverse signal hit at
1.4474 yesterday. Resistance at 1.4607 (yesterday's high); breach would expose upside to 1.4638
(May 14 high), then 1.4916 (May 13 high). Support at 1.4410 (hourly chart), then at 1.4366
(yesterday's low); breach would expose downside to 1.4329 (Wednesday's low), then 1.4257
(Tuesday's low), 1.4230 (May 20 14-month low) and 1.4108 (March 30, 2009 reaction low).

USD/CHF - to consolidate with risks skewed lower. Pair undermined by broadly weaker USD
undertone; but losses tempered by expectations of more CHF-selling intervention by SNB, short-
CHF carry trades on lower risk aversion. Data focus: 0615 GMT Swiss April trade balance, 0930
GMT Swiss May KOF economic barometer. Daily chart mixed as MACD bullish, but stochastics
bearish at overbought, bearish parabolic stop-and-reverse signal hit at 1.1510 yesterday. Support
at 1.1481 (yesterday's low); breach would target 1.1447 (May 21 low), then 1.1420 (May 19 low)
and 1.1267 (May 18 low). Resistance at 1.1588 (hourly chart); breach would expose upside to
1.1655 (yesterday's high), then 1.1697 (Tuesday's 13-month high) and 1.1740 (April 20, 2009
reaction high).

USD/CAD - to trade with risks skewed lower. Pair undermined by increased investor risk
appetite, weaker global USD, stronger commodity and oil prices (Nymex crude settled up $3.04
yesterday at $74.55/bbl). But USD/CAD downside limited by positions adjustment before
weekend. Data focus: 1230 GMT Canada 1Q balance of payments. USD/CAD daily chart mixed
as MACD bullish, but stochastics falling from overbought. Support at 1.0401 (hourly chart);
breach would expose downside to 1.0240 (May 18 low), then 1.0213 (55-day moving average).
Resistance at 1.0595 (hourly chart); breach would expose upside to 1.0718 (yesterday's high),
then 1.0746 (Wednesday's high) and 1.0851 (Tuesday's 7-month high).

EUR/JPY - to trade with risks skewed higher. Cross underpinned by carry trades amid decreased
risk aversion; but gains tempered by positions adjustment before weekend. Daily chart mixed as
MACD bearish, but stochastics turned bullish at oversold. Resistance at 112.76 (yesterday's
high); breach would expose upside to 114.05 (Monday's high), then 114.40 (May 21 high),
115.49 (May 18 high) and 117.00 (May 14 high). Support at 110.40 (hourly chart); breach would
expose downside to 109.19 (yesterday's low), then 108.83 (Tuesday's 8.5-year low), 106.76
(Nov. 8, 2001 reaction low) and 105.45 (Sept. 4, 2001 reaction low).

EUR/GBP - to range-trade. Daily chart mixed as stochastics in bearish mode, MACD neutral.
Resistance at 0.8510 (yesterday's high); breach would expose upside to 0.8585 (Tuesday's high),
then 0.8674 (Monday's high), 0.8773 (May 21 high) and 0.8807 (May 7 high). Support at 0.8419
(yesterday's low); breach would target 0.8397 (June 22, 2009 reaction low), then 0.8230 (Nov.
27, 2008 reaction 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.)