Jim Cote //
Chicago, July 27 (BridgeNews) - The U.S. dollar fell slightly from overnight levels after the second-quarter initial U.S. GDP estimate of 0.7% was weaker than many economists expected. Consumer spending slowed to 2.1% in Q2, compared to a 3.4% growth rate in the first quarter. Other data to be featured Friday are the University of Michigan consumer confidence survey for July and June single-family home sales.

Sterling/dollar GBP/USD slipped to a 2-day low around 1.4230 before the GDP induced rally. Dollar/Swiss franc also fell. Dollar/yen rallied to 124.00 before GDP, and dollar/Canada slipped to a 2-week low of 1.5295, with dealers reporting sales of USD/CAD out of Switzerland.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 123.77 123.67 0.10 123.68 124.09
EUR/USD 0.8790 0.8780 0.0010 0.8757 0.8804
EUR/JPY 108.81 108.61 0.20 108.44 108.94
GBP/USD 1.4272 1.4275 -0.0003 1.4241 1.4298
USD/CHF 1.7146 1.7197 -0.0051 1.7128 1.7245
USD/CAD 1.5313 1.5327 -0.0014 1.5295 1.5341
AUD/USD 0.5056 0.5094 -0.0038 0.5059 0.5094
NZD/USD 0.4112 0.4122 -0.001 0.4107 0.4127
SP.1 1206.70 Bridge N/A 1.20 1204.90 1209.00
ND.1 1675.00 Bridge N/A 15.50 1661.00 1690.00

USD/JPY pushed to an intraday high of 124.00 in early trading amid position-squaring ahead of second-quarter initial U.S. GDP estimate, which came in at 0.7%. U.S. GDP was measured at an annualized 1.2% in the first quarter. Consumer spending rose 2.1% in the second quarter, compared to a 3.4% growth rate in the first quarter.
The preliminary consumer price index for Tokyo metropolitan area in July stood at 99.5, down 0.9% from a year earlier and down 0.4% from June, the Ministry of Public Management, Home Affairs, Posts and Telecommunications announced Friday. The nationwide CPI in June was down 0.5% on year and down 0.3% on month, the ministry said.
Tokyo overall CPI and core CPI fell on year for 23 and 22 consecutive months respectively through July, both showing the longest period of falls.
The outlook is bullish despite the GDP numbers.

Support: 123.68 (overnight low), 122.84 (60-day moving average), 122.70 (July 20 trough), 122.50 (Gann 50-point pivot; targets: 122.00/123.00).
Resistance: 124.00 (overnight high), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 124.42 (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).

EUR/USD slipped to an intraday low of 0.8754 in European morning trading on Friday as the market positioned itself for the release of U.S. GDP data and the July University of Michigan consumer confidence index later in the day. The pair moved into positive territory after the GDP numbers. Some slightly poor French and Italian data had little immediate impact though they did the EUR no good.
France's INSEE business confidence index for July fell to a below-forecast reading of 99 from 102 in June. Italian preliminary CPI rose 0.1% m/m and 2.9% y/y in July, above that indicated by cities data released earlier in the month. The data had little impact, though it somewhat dented sentiment toward the EUR.
The euro zone recorded a 1.7 bln EUR trade surplus with the rest of the world in May at the first estimate. In April, the euro zone recorded a 0.6 bln EUR deficit, revised up from a 3.0 bln EUR deficit at the first estimate. The deficit for the first 5 months of 2001 came to 2.9 bln EUR, compared to a 0.7 bln EUR deficit in the same period of 2000.
The outlook is bullish with the 0.8800 point resistance which must be broken.

Support: 0.8757 (overnight low), 0.8603 (20-day moving average), 0.8350 (July 6 low; 7-month low).
Resistance: 0.8796 (overnight high), 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).

* EUR/JPY rallied after the U.S. GDP report on ideas the euro was a better alternative to the yen as a growth currency.
The outlook is neutral.

Support: 108.78 (overnight low), 106.93 (20-day moving average), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 104.54 (June 20 low).
Resistance: 108.91 (overnight high), 109.07 (July 25 high; 2-month high), 109.72 (May 16 high; top of consolidation area), 111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend).