Daily Market Outlook for 10.07.2013

The dollar fell against the yen on Wednesday on position squaring, with the near-term focus on whether the minutes of the Federal Reserve's June meeting and a speech by Chairman Ben Bernanke will give fresh ammunition to dollar bulls.

The dollar pulled lower from a six-week high of 101.54 yen set on Monday.

The euro and sterling took a breather after having tumbled the previous day, dented by growing expectations that central banks in the Eurozone and Britain will have to keep policy loose for a long time.

The Australian dollar bounced back after falling earlier on Wednesday as weak Chinese trade data reinforced expectations of a slowdown in China, a major export market for Australia.

Later today, investors will scrutinize the minutes of the Fed's June monetary policy meeting and a speech by Bernanke, watching for fresh hints on when the Fed will start reducing its asset purchases, and whether there will be any catalysts for further dollar buying.

 

EURUSD

 

The Euro ended Tuesday’s trading in red after breaking below 1.2795 support and posting fresh low at 1.2754, where weekly Ichimoku cloud base contained dips, just ahead of key 1.2750/44 support. Eventual push below the latter that also marks multi-month platform, is required to complete weekly Head and Shoulders pattern that would trigger more significant losses, with round figure 1.2700 support and 1.2660, November 2012 low, seen as next targets. Consolidative actions may precede fresh weakness, as technicals hold firm bearish tone, with 1.2800/50 zone expected to cap. Only lift above 1.29 barrier would ease immediate bear pressure.

Levels to watch: 1.2800; 1.2850; 1.2880; 1.2900 / 1.2777; 1.2754; 1.2744; 1.2700

 

EURJPY

 

The pair came under pressure after recovery rally rejection at 130.52 triggered fresh weakness that broke below short-term base at 128.60. Confirmation of failure swing opens way for further retracement, as 61.8% of 126.55/131.11 upleg at 128.29, has been cracked. Fresh bears are looking for 128.00 and 127.63, Fibonacci 76.4% , next targets. Session high at 129.34, reinforced by 55DMA, offers good resistance, while only break above 130.54, yesterday’s high, would shift focus higher.

Levels to watch: 129.00; 129.34; 129.70; 130.00 / 128.20; 128.00; 127.63; 127.26

 

GBPUSD

 

Cable eventually cleared the last obstacle at 1.4830, 12/03 low and posted fresh annual low on a dip to 1.4812 so far. Hesitation ahead of psychological 1.4800 support, is seen likely, with key barriers at 1.4980/1.5000 protecting the upside. Bearish resumption below 1.4800, sees no significant obstacles en-route towards 1.4345/1.4230, Jun / May 2010 lows and short-term targets.

Levels to watch: 1.5910; 1.4980; 1.5000; 1.5057 / 1.4919; 1.4871; 1.4856; 1.4830

 

USDJPY

 

Sort-term structure weakened, as the price broke below 100.75, two-day consolidation range and cracked the next support at 100.40, 50% retracement of 99.25/101.52 upleg. Negative hourly studies keep the downside in focus, however, reversal above 100.00 support, would keep broader bulls in play for fresh attempt higher. Conversely, loss of 100 handle is expected to sideline bulls and allow for stronger correction.

Levels to watch: 100.75; 101.00; 101.29; 101.52 / 100.28; 100.00; 99.48; 99.25

 

AUDUSD

 

The pair extended short-term recovery rally from 0.9035 base after clearing previous strong barrier at 0.9179. Short-term price action gets congested at 0.9200 barrier, as the price fails to break higher and enters consolidative mode. Short-term bulls would remain intact while range bottom at 0.9130 zone holds and would look for further recovery towards 0.9250, 01/07 high and 0.9300, 50% of 0.9555/0.9035.

Levels to watch: 0.9225; 0.9252; 0.9270; 0.9343 /  0.9130; 0.9100; 0.9081; 0.9035; 0.9000;

 

AUDNZD

 

Short-term price action remains entrenched within 1.1650/1.1785 consolidation range, with tone being negatively aligned, following recovery rally’s stall at 1.1785 and reversal under 1.1700 mark. Short-term studies are negative and see increased downside risk, as long as price holds below 1.1715/32, 50% /  61.8% retracement of 1.1785/1.1645 downleg, with break higher, required to open 1.1785, range top, for retest. Conversely, loss of 1.1645 base, would signal resumption of broader bear-trend and open 1.1600 next.

Levels to watch: 1.1715; 1.1732; 1.1752; 1.1785 / 1.1653; 1.1645; 1.1600; 1.1580

 

XAUUSD

 

Spot Gold holds positive short-term tone off 1180 low, as recovery extended to 1260 so far. Corrective pullback is seen preceding fresh leg lower, with dips to be contained above 1233, near 50% of 1208/1260 upleg. Initial target lies at 1269, with extension higher to open key 1300 barrier. Short-term studies are positive and favor the upside, while only break below 1233 would dent bulls.

Levels to watch: 1260; 1267; 1272; 1292 / 1240; 1233; 1218; 1208

 

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