* USD/JPY's spike up to a 5-day high of 125.31 filled offers from Japanese exporters between 125.10 and 125.30. The pair's gains match expectations for a deteriorating Japanese economy.
The Bank of Japan slightly downgraded its economic assessment for July, saying economic adjustments are intensifying. The bank said that declines in corporate profits are going to be inevitable for a while. Japan's department store sales also failed to inspire FX traders. Department store sales in Tokyo rose 3.8% in June from a year earlier to 178.1 billion yen. Sales reached the highest level of the year in June mainly due to the positive impact of events and renovations as well as warmer weather.
Meanwhile, Chicago Federal Reserve Bank President Michael Moskow told the Financial Times that the U.S. economy is likely to improve over the rest of this year, although risks of a sharp slowdown in consumption, volatile energy prices and a deteriorating international environment still cloud the outlook.
Resistance is seen at 124.52 from the 20-day moving average and at 125.50 from the Gann 50-point pivot that targets 125.00 and 126.00. The intraday outlook is slightly bullish.

Support: 124.66 (overnight low), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 123.86 (July 11 low), 122.63 (60-day moving average), 122.50 (Gann 50-point pivot; targets: 122.00/123.00).
Resistance: 125.31 (overnight high), 124.52 (20-day moving average), 125.50 (Gann 50-point pivot; targets: 125.00/126.00), 126.15 (July 6 high; 3-month high), 126.84 (April 2 high; 29-month high), 127.00 (Gann 50-point pivot; targets: 126.50/127.50).

* In addition to Reynders' reported comments, which also said the euro's exchange rate versus the U.S. dollar is not a problem of prime importance, EUR/USD's advance above the overnight 4-day high of 0.8593 might be hindered by the resistance of a trendline at 0.8620.
On the economic agenda, the annual rise in German wholesale prices declined to 3.1% in June, which was the lowest level since November 1999, when wholesale prices were up 2.6% on the year. Italian industrial production advanced an unexpectedly weak 0.3% in May.
The intraday outlook is slightly bullish.

Support: 0.8540 (overnight low), 0.8526 (20-day moving average), 0.8350 (July 6 low; 7-month low), 0.8245 (1.382% Fibonacci extension level the Jan.6-May 4, 19 downtrend; target of fifth Elliott wave), 0.8228 (Oct. 26 low; lifetime low).
Resistance: 0.8593 (overnight high), 0.8642 (July 11 peak), 0.8673 (June 15 peak), 0.8790 (38.2% Fibonacci retracement level of the June-October downtrend), 0.8848 (61.8% Fibonacci retracement level of the Nov. 27-Jan. 5 uptrend), 0.8873 (200-day moving average).

* EUR/JPY climbed to a 5-day high of 107.53 with help from both of its components. The cross currency is facing resistance at 107.75 from the 100-day moving average and at 107.98 from the July 11 peak. The outlook is slightly bullish.

Support: 106.60 (overnight low), 106.17 (20-day moving average), 106.04 (60-day moving average), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 104.54 (June 20 low), 104.31 (200-day moving average).
Resistance: 107.53 (overnight high), 107.75 (100-day moving average), 107.98 (July 11 peak), 109.72 (May 16 high; top of consolidation area), 111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend).

* GBP/USD declined within Friday's range in a market dominated by M&A activity. BP PLC has agreed to buy a majority stake in Veba Oel, the gas stations and oil unit of German utility E.ON AG, in an asset swap worth around 6.5 billion euros. In return, E.ON will acquire BP's stake in Gelsenberg AG, which holds 25.5% of Ruhrgas, Germany's largest gas distributor. The deal is subject to approval by anti-trust authorities. The intraday outlook is mixed to slightly bearish.

Support: 1.3986 (overnight low), 1.3911 (June 20 low), 1.3688 (June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4040 (overnight high), 1.4088 (20-day moving average), 1.4156 (60-day moving average), 1.4187 (July 11 high), 1.4224 (June 27 peak), 1.4254 (100-day moving average).