NEWS / Fiscal Policy, Budget

Dollar closes bearish

By Marc Spaelti - ACM Senior Trader Yesterdays News and Events: After the large spike late Thursday, the Dollar continued on a soft note on Friday, reaching 3-week lows to close the week and the month on a rather gloomy note. EURUSD climbed to 1.2790, reaching the 62% retracement level of the June-fall, this later being a fairly strong resistance, it may take a day or two to break it, once done we expect the pair to continue rising all the way to 1.30. Cable has traded to 1.85, a 4-cent jump in two days, with a sold bas around 1.8350, the pair is poised to test medium-term resistance above 1.86. USDCHF has closed the week underneath of its 1.2260 key-support, outlook is for a fall to at least 1.21, the psychological 1.20 area will come under attack soon. USDJPY finally cracked the 114.65 support, a low of 114.10 traded after a good June Tankan. Expect to advance to strong 113.80 support, a break there is particularly bearish, calling for a move down to the 110 area during the month of July. Todays Key Issues: Only date today is the US ISM Manufacturing Index for June, it stood at 54.4 in May and is believed to increase to 55.0. The Risk Today: 4-H EURUSD: 1.2785/90 is 62% fibo retracement. In light of the steep rise, a correction seems highly likely, buy levels are the 50% and 35% levels at 1.2730 and 1.2670 respectively. Such a dip will also help in drawing a bullish trend-line later on this week. On top, should the pair continue higher without a correction from here, it can reach 1.2885. 4-H GBPUSD: It has not yet reached any target, there is space to trade into the 1.85??™ handle for a test of the red and eventually the more important blue resistance-line at 1.8645 today, key support and buy level at 1.8350. Resistance and Support: EURUSD GBPUSD USDJPY USDCHF 1.2885 S 1.8580 K 115.60 S 1.2420 S 1.2815 M 1.8530 M 115.05 M 1.2305 S 1.2790 K 1.8505 S 114.65 K 1.2260 K 1.2780 1.8450 114.50 1.2245 1.2765 S 1.8425 M 114.30 M 1.2200 S 1.2730 S 1.8385 M 113.85 S 1.2160 K 1.2670 K 1.7350 S 113.15 S 1.2120 T S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot