DJ ASIA DAILY FOREX OUTLOOK -

Majors
Tue Jul 20 19:43:00 EDT 2010
SINGAPORE (Dow Jones)--Following are expected trading ranges and outlooks for nine major
currency pairs today:

Immediate Range Larger Range

USD/JPY 86.67-87.58 86.46-88.00
EUR/USD 1.2838-1.2956 1.2707-1.3028
AUD/USD 0.8712-0.8848 0.8665-0.8871
NZD/USD 0.7073-0.7175 0.7041-0.7301
GBP/USD 1.5210-1.5309 1.5150-1.5350
USD/CHF 1.0481-1.0560 1.0446-1.0617
USD/CAD 1.0419-1.0483 1.0376-1.0586
EUR/JPY 111.43-112.85 110.68-113.40
EUR/GBP 0.8421-0.8484 0.8361-0.8531

(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 JPY-funded carry
trades amid positive risk sentiment (VIX fear gauge eased 7.86% to 23.93), Wall Street's gains
overnight (DJIA up 0.74%, S&P up 1.14%) on speculation of more supportive measures for U.S.
economy from 1400 GMT Fed Chairman Bernanke's semi-annual testimony before Senate
Banking Committee - many market participants expect Bernanke to suggest that economic
outlook has softened, further monetary stimulus could come from restarting purchases of
Treasury securities & mortgage-backed bonds. Investor risk appetite boosted further by stronger-
than-expected Apple's 3Q results after close. USD/JPY also supported by USD demand for
import settlements. But USD/JPY gains tempered by lower U.S. Treasury yields, Japan exporter
sales; 5.0% fall in U.S. June housing starts (vs 3.2% drop expected) which overshadowed 2.1%
increase in U.S. June building permits (vs +0.7% expected). Other data focus: 2350 GMT Japan
June BOJ monetary policy meeting minutes. USD/JPY daily chart positive-biased as stochastics
turned bullish near oversold; MACD staging bullish crossover against its exponential moving
average. Resistance at 87.58 (yesterday's high); breach would expose upside to 88.00 (previous
base set July 13), then 88.43 (Thursday's high), 89.11-89.15 band (July 14 high-July 12 high)
and 89.42-89.47 band (June 29 high-June 28 high). Support at 86.67 (yesterday's low), then at
86.46 (Monday's low) and 86.25 (Friday's low); breach would target psychological round-
numbered levels of 86.00, 85.00, then 84.81 (Nov. 27 bottom).

EUR/USD - to consolidate after retreating sharply from fresh 10-week high of 1.3028 yesterday.
Pair weighed by worries ahead of results of European bank stress tests due Friday - compounded
by reports Germany's Hypo Real Estate Bank had failed its stress test; Hungary having trouble
placing paper in wake of weekend's IMF/EU standoff, selling only HUF35 billion of 3- month
Treasury bills vs HUF45 billion on offer. But EUR/USD downside limited by EUR demand for
long-EUR carry trades on improved market risk sentiment as equities rally. EUR/USD daily
chart mixed as MACD bullish, but stochastics bearish at overbought; bearish key-reversal-day
pattern completed yesterday. Support at 1.2838 (yesterday's low); breach would expose
downside to 1.2707 (Thursday's low), then 1.2680 (July 14 low) and 1.2520 (July 13 low).
Resistance at 1.2956 (hourly chart), then at 1.3028 (yesterday's high); breach would expose
upside to 1.3093 (May 10 high), then 1.3124 (38.2% Fibonacci correction of decline from Nov.
25 high of 1.5144 to June 7 low of 1.1875) and 1.3342 (April 30 reaction high).

AUD/USD - to consolidate with bullish bias. Pair underpinned by Aussie demand for long-AUD
carry trades on increased investor risk appetite; firmer commodity prices (CRB spot index closed
up 0.32 yesterday at 261.52); growing expectations China will avoid further tightening measures;
yesterday's release of RBA minutes suggesting interest rates could be hiked again next month.
But AUD/USD gains tempered by caution ahead of European bank stress test results later this
week. Data focus: 0030 GMT Australia May Westpac-Melbourne Institute indexes of economic
activity. AUD/USD daily chart positive-biased as MACD bullish, stochastics revert to bullish
mode at overbought. Resistance at 0.8845-0.8848 band (yesterday's high-Thursday's high);
breach would expose upside 0.8871 (2-month high set July 14, near 100-day moving average),
then 0.8968 (200-day moving average), psychological 0.9000 and 0.9026 (May 13 high).
Support at 0.8712 (hourly chart), then at 0.8665 (yesterday's low); breach would target 0.8631
(Monday's low), then 0.8619 (July 8 low), 0.8595 (55-day moving average) and 0.8510 (previous
cap set July 2).

NZD/USD - to consolidate with risks skewed higher. Pair underpinned by NZD demand for
long-NZD carry trades as Wall Street's gains whet investor risk appetite, positive risk sentiment
also bolstered by growing market views China officials will ensure any slowdown in country's
economy won't be overly severe by investing further in infrastructure; firmer commodity prices;
stronger expectations for RBNZ rate hike at its July 29 review following BOC's 25-bp increase
overnight. Data focus: 0300 GMT NZ June credit card statistics. NZD/USD daily chart mixed as
MACD bullish, but stochastics still in bearish mode. Resistance at 0.7175 (yesterday's high);
breach would expose upside to 0.7301 (Thursday's high), then 0.7325 (April 30 reaction high)
and 0.7441 (Jan. 14 reaction high). Support at 0.7073 (hourly chart), then at 0.7041 (yesterday's
low) and 0.7027-0.7019 band (Monday's low-July 8 low, near 100-day moving average); breach
would expose downside to 0.6974 (previous cap set July 6), then 0.6960 (55-day moving
average).

GBP/USD - to consolidate. GBP/USD supported by positive global risk sentiment, GBP demand
on easing EUR/GBP cross; but topside limited by more-than-expected UK public sector
borrowing of GBP14.5 billion in June (vs GBP13.5 billion forecasted); UK CBI survey showing
its July industrial output balance fell to +6 from June's +15; concerns over negative impact of
fiscal tightening on UK economy. Data focus: 0830 GMT UK July BOE MPC meeting minutes.
GBP/USD daily chart mixed as stochastics bearish, but MACD still in bullish mode. Resistance
at 1.5309 (yesterday's high), then at 1.5350 (Monday's high); breach would expose upside to
1.5449 (Friday's high), then 1.5471 (Thursday's high), 1.5498 (April 26 reaction high) and
1.5523 (April 15 reaction high). Support at 1.5210 (hourly chart); breach would expose downside
to 1.5150 (yesterday's low), then 1.5086 (previous cap set July 12), 1.4946 (July 12 low), 1.4871
(July 1 reaction low) and 1.4854 (June 25 low).

USD/CHF - to consolidate with bullish bias. Pair underpinned by short-CHF carry trades on
improved investor risk appetite; but gains tempered by broadly softer USD undertone; strong
12% rise in Swiss June exports to CHF17.2 billion for seventh straight month of increase. Daily
chart positive-biased as MACD bullish, stochastics rising from oversold. Resistance at 1.0556-
1.0560 band (yesterday's high-Monday's high); breach would expose upside to 1.0617 (July 14
high), then 1.0645 (July 13 high), 1.0675 (July 12 reaction high) and 1.0697 (July 2 high).
Support at 1.0481 (hourly chart), then at 1.0449-1.0446 band (yesterday's low-Monday's low);
breach would temper near-term positive outlook, exposing downside to 1.0396 (low on both
Thursday & Friday), then 1.0363 (Jan. 25 reaction low), 1.0127 (Jan. 11 reaction low) and parity.

USD/CAD - to consolidate with risks skewed lower. Pair undermined by increased investor risk
appetite, firmer commodity & oil prices (Nymex August crude settled up 90 cents yesterday at
$77.44/bbl). But USD/CAD downside limited by more-cautious-than-expected BOC statement
accompanying central bank's widely-anticipated decision to raise interest rates by 25 bps to
0.75%. Data focus: 1230 GMT Canada May wholesale trade. USD/CAD daily chart mixed as
MACD neutral, stochastics turning bearish; bearish key-reversal-day pattern completed
yesterday. Support at 1.0419 (yesterday's low); breach would expose downside to 1.0376
(Friday's low), then 1.0278-1.0273 band (Thursday's low-July 13 low), 1.0178 (June 22 low) and
1.0133 (June 21 reaction low). Resistance at 1.0483 (hourly chart); breach would expose upside
to 1.0586 (yesterday's high), then 1.0606 (July 7 high), 1.0677 (July 6 reaction high) and 1.0851
(May 25 reaction high).

EUR/JPY - consolidate with risks skewed higher. Cross supported by stronger investor risk
appetite; but gains tempered by worries ahead of results of European bank stress tests due Friday.
Daily chart mixed as MACD bullish, but stochastics bearish at overbought. Resistance at 112.85
(hourly chart); breach would expose upside to 113.37-113.40 band (yesterday's high-Thursday's
high), then 114.16 (June 3 reaction high), 114.40 (May 21 reaction high) and 115.49 (May 18
reaction high). Support at 111.46-111.43 band (yesterday's low- Monday's low); breach would
expose downside to 110.68 (July 13 low), then 109.29 (July 7 low), 109.12 (July 6 low) and
107.47 (July 1 low).

EUR/GBP - to consolidate with risks skewed lower. Cross undermined by worries ahead of
results of European bank stress tests due Friday. Daily chart mixed as MACD bullish, but
stochastics turning bearish at overbought. Support at 0.8421 (Monday's low); breach would
expose downside to 0.8361 (Friday's low), then 0.8323 (Thursday's low), 0.8317-0.8312 band
(July 14 low-July 13 low) and 0.8288 (July 7 low). Resistance at 0.8484 (hourly chart); breach
would expose upside to 0.8531 (yesterday's high, matching Monday's high), then 0.8547 (May
28 high), 0.8597 (100-day moving average) and 0.8758 (200-day moving average).

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.)