By Cornelius Luca
New York, July 9 (BridgeNews) - The U.S. dollar is seen treading water in a typical Monday session due a lack of trading factors. U.S. Treasury Secretary Paul O'Neill attempted to add interest to the bland Group of Seven meeting in Rome by saying that the soft U.S. growth is well-placed for an imminent recovery. But a leading group of business economists predicted Monday that the U.S. economy will grow at an anemic rate of about 1-2% in the second half, not much better than the slow pace seen in the first half of the year.

Euro/dollar and sterling/dollar slipped from six-day highs of 0.8502 and 1.4127, respectively, dollar/Swiss franc bounced from an 11-day low of 1.7886, while dollar/yen swerved quietly, mostly within a 30-pip range in Europe, after slipping in Asia to a four-day low of 125.41. Dollar/Canada countered its Friday's gains to a one-week high of 1.5233 with a decline on profit taking that dragged it back below the 20-day moving average.
This week's event agenda will only come to life on Friday, when the release of the June retail sales will be augmented by the June producer price index and the University of Michigan consumer confidence survey for early July. In the absence of data on Monday, dollar/yen and euro/dollar should see mild weakness in two-way activity.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 125.54 125.85 -0.31 125.41 125.98
EUR/USD 0.8455 0.8477 -0.0022 0.8446 0.8502
EUR/JPY 106.16 106.60 -0.44 106.00 106.71
GBP/USD 1.4058 1.4108 -0.0050 1.4056 1.4127
USD/CHF 1.7975 1.7930 0.0045 1.7886 1.7995
USD/CAD 1.5177 1.5228 -0.0051 1.5179 1.5228
AUD/USD 0.5052 0.5080 -0.0028 0.5050 0.5088

* USD/JPY traded quietly near a 4-day low of 125.41. The pair had slipped in Asia on profit taking October after marking Friday a 3-month high of 126.15 in extension of its solid gains since June 1.
The pair is swerving around the 125.50 Gann 50-point pivot, which targets 125.00 and 126.00.
Chief Cabinet Secretary Yasuo Fukuda indicated that Prime Minister Junichiro Koizumi is not softening his stance on his policy to ensure that all major banks dispose of non-performing loans within two to three years. Fukuda said it is not necessary for major banks to dispose of every single debt and such a goal has never been part of the government's platform.
Japanese Prime Minister Koizumi does not intend to change his Cabinet line-up after the upper house elections on July 29, making it likely that Shiokawa will continue serving as finance minister. Analysts note that Shiokawa was selected for the prestigious post of finance minister as a reward for handling Koizumi's party elections, while Shiokawa himself admits he knows little about economics or finance.
On the economic agenda, Japan's machinery makers saw the value of orders from the private sector, excluding orders for ships and those from the electric power industry, fall an adjusted 2.1% in May on the month. The May figure is better than the average economist outlook of a 6.3% drop.
The USD/JPY outlook is mixed to slightly bearish.

Support: 125.50 (Gann 50-point pivot; targets: 125.00/126.00), 125.41 overnight low), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 123.93 (20-day moving average), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 122.42 (60-day moving average), 121.05 (Gann 50-point pivot; targets: 120.55/121.55).
Resistance: 125.98 (overnight high), 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).

* Profit taking sank EUR/USD from a 6-day high of 0.8502 to an intraday low of 0.8446. Traders said volumes were extremely narrow with no particular news driving the market.
German industrial production rose a well above forecast seasonally adjusted 0.9% m/m in May, though with little market impact.
In a La Stampa interview, Italian Deputy Economy Minister Baldassari said Italy will not be able to meet its EU budget deficit target in 2001, and may have to revise the figure in its 2002 stability pact program.
The outlook is mixed to slightly bearish.

Support: 0.8446 (overnight low), 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: 0.8502 (overnight high), 0.8530 (20-day moving average), 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), 0.8877 (200-day moving average).

* One day after climbing to an 8-day high of 106.79, EUR/JPY slipped on profit taking. However, the cross currency remained in an inside range. The outlook is mixed to slightly bearish.

Support: 106.00 (overnight low), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 105.70 (20-day moving average), 104.54 (June 20 low), 104.02 (200-day moving average).
Resistance: 106.71 (overnight high), 106.21 (60-day moving average), 107.70 (100-day moving average).

* GBP/USD fell into negative territory from a 6-day high of 1.4127 in line with EUR/USD.
Seasonally adjusted UK input PPI rose a slightly above forecast 0.1% m/m in June while seasonally adjusted core output PPI rose an as forecast 0.1% m/m in the same month. The data had little impact.
The GBP/USD outlook is mixed to slightly bearish.

Support: 1.4056 (overnight low), 1.3911 (June 20 low), 1.3688 (June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4127 (overnight high), 1.4059 (20-day moving average), 1.4181 (60-day moving average), 1.4224 (June 27 peak), 1.4274 (100-day moving average).