Dollar fell to 3-week low as Oil surged to record high and US stock dropped.

The Dollar fell to three-week lows against the Euro on Friday, dented after Oil prices surged to a record high, data showed US consumer sentiment hit a 28-year low and Wall Street stocks extended their slide. The Dollar would stay under pressure after US financial shares fell on Friday on worries about more credit losses. Lehman Brothers forecast Merrill Lynch would write down another $5.4bio in the 2nd quarter, while Moody's said it may cut Morgan Stanley's credit rating. The European Central Bank holds a policy meeting on Thursday and is widely expected to raise rates to 4.25% fight rising prices. The key US jobs data is also due on Thursday.
News and Events:


The Dollar fell to three-week lows against the Euro on Friday, dented after Oil prices surged to a record high, data showed US consumer sentiment hit a 28-year low and Wall Street stocks extended their slide.

The battered stock market and worries over the credit market scaled back expectations for how soon the Federal Reserve could boost interest rates, even after the central bank said inflation risks have risen and kept interest rates on hold last week.

The Dollar would stay under pressure after US financial shares fell on Friday on worries about more credit losses. Lehman Brothers forecast Merrill Lynch would write down another $5.4bio in the 2nd quarter, while Moody's said it may cut Morgan Stanley's credit rating.

The European Central Bank holds a policy meeting on Thursday and is widely expected to raise rates to 4.25% fight rising prices. The key US jobs data is also due on Thursday.

EurUsd hit 1.5798 high on Friday before closing 0.18% up to 1.5790. UsdJpy was down 0.66% to 106.14, off three-week lows of 105.86 hit on Friday. UsdChf was 0.48% lower to 1.0183. GbpUsd rose 0.35% to 1.9946, hitting 1.9806 two-month high. EurJpy was 0.46% lower at 167.63 reversing from last week 169.57 record high.






Today's Key Issues (time in GMT):


08:00 NOK May Credit indicator 14% vs 14.3%
08:00 NOK May Retail sales 0.3% vs 0.4%
08:30 GBP May BoE Consumer Credit 1B vs 0.94B
08:30 GBP May Mortgage Approvals 51k vs 58k
08:30 GBP May Mortgage Lending 6B vs 6.35B
09:00 EUR June Euro-zone Inflation 3.9% vs 3.7%
12:30 CAD April GDP 0.3% vs -0.2% (MoM)
13:45 USD June Chicago PMI 48 vs 49.1
The Risk Today:

EurUsd:
Current trading range is still 1.5400 to 1.5800. Friday high 1.5798 is putting further upside in sight. Initial resistance holds 1.5844 June 9th high. A break up there would reopen the way up to 1.6000 Pivot point resistance ahead of key resistance 1.6200 market target. On the downtrend, weakness below 1.5400 will put the current light 2-month uptrend on hold. This may open way down to 1.5000 key level. Support holds 1.5304 13th June low.


GbpUsd:
Cable broke over consolidation 1.9400 – 1.9800 range last Thursday. It closes last week at 1.9946. On the upside, psychological 2.0000 level stays into focus. On the downside, a reversal below 1.9600 might bring again focus on 1.9337 January low and 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Initial support holds 1.9800 former range resistance. Strong support holds 1.9363 20th February and 14th May low.


UsdJpy:
Market broke down lower 3-month trendline at 106.30. Current 3-month uptrend failed to overtop 108.59 16th June high. More profit taking would bring the market lower than 105 and maybe back to 100 – 104 consolidation trading range. Initial support hold 105.86 Friday low. Renewed advance to mid-June 108.59 would put 110.10 strong resistance (Trendline) into focus and mid January double top ahead of 111.92 early January high.


UsdChf:
Market couldn’t hold 1.0200 lower support last Friday. Strong support holds 1.0148 June 9th low. Initial support holds 1.0166 Friday low. Further weakness may open the way toward 0.9637 17th March low. June 13th 1.0541 high holds initial resistance. A return over 1.0200 would bring back consolidation 1.0200 – 1.0600 range.



By
Jean-Claude Braha
- ACM Advanced Currency Markets, Geneva, Switzerland
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Provided by ACM: http://www.ac-markets.com