Jim Cote // New York, Aug. 1 (BridgeNews) - It took a full day for Tuesday's weak economic data to translate into a weaker U.S. dollar. Despite weak data Wednesday for the euro, the unit was the main beneficiary of the trepidation surrounding the U.S. economy. The euro hit a 10-week top in thin trade. Yen rose on buying by Japanese exporters. Traders await this morning's U.S. July NAPM manufacturing index.

Euro/dollar rose to a 10-week high in thin trade, dollar/Swiss franc fell in line with the euro advance, sterling/dollar hit a 10-day top, while dollar/Canada rose.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 124.57 125.05 -0.48 124.49 125.23
EUR/USD 0.8814 0.8756 0.0058 0.8757 0.8830
EUR/JPY 109.79 109.52 0.27 109.38 110.03
GBP/USD 1.4310 1.4240 0.0070 1.4248 1.4327
USD/CHF 1.7133 1.7275 -0.0142 1.7104 1.7271
USD/CAD 1.5360 1.5336 0.0024 1.5330 1.5370
AUD/USD 0.5134 0.5096 0.0038 0.5081 0.5139

The market will focus on July NAPM manufacturing index and the June construction spending.

USD/JPY was briefly lifted to a 2-day high of 125.21 in early Asian trading on bidding from European and U.S. names. However, selling from Japanese exporters knocked the pair back to a 2-day low of 124.58 towards the Asian close. There are reportedly a range of 125 strike options with Friday expiries in the market.
The Nikkei underpinned the JPY's gains after it rose in response to the news that Daiwa bank will merge with Kinki Osaka and Nara banks and is to sell its trust banking division.
Former BOJ board member Taketomi said he favours a moderately weak JPY that reflects economic fundamentals, adding that current levels are about right.
The outlook remains bullish unless the 20-day moving average and the 124.46 Fibonacci 50% retracement level of the August 1998-January 2000 downtrend fails to hold.

Support: 124.58 (overnight low), 124.47 (20-day moving average), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 123.00 (60-day moving average), 122.70 (July 20 trough), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 121.05 (Gann 50-point pivot; targets: 120.55/121.55).
Resistance: 125.21 (overnight high), 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 hit a 10-week high of 0.8830 in extremely thin European trade.
Poor euro zone manufacturing PMI's failed to have any impact. The euro zone reading slipped to 47.3 in July from 47.9 in June, while Germany slid to 46.3 from 46.6. France dipped to 48.0 from 48.8 in June, while Italy fell to 46.4 in July from 48.3.
Euro zone unemployment was unchanged in June from May, at an 8.3% rate.
The outlook is neutral until the euro proves its rally is for real.

Support: 0.8757 (overnight low), 0.8648 (20-day moving average), 0.8350 (July 6 low; 7-month low).
Resistance: 0.8830 (overnight high), 0.8790 (38.2% Fibonacci retracement level of the June-October downtrend), 0.8825 (July 26 peak; two-month peak), 0.8848 (61.8% Fibonacci retracement level of the Nov. 27-Jan. 5 uptrend).

EUR/JPY hit a three-month top but faces tough round-numbered resistance at 110.00.
The outlook is neutral.

Support: 109.38 (overnight low), 107.50 (100-day moving average), 107.66 (20-day moving average), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 104.54 (June 20 low), 105.12 (200-day moving average).
Resistance: 110.03 (overnight high), 111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend).

GBP/USD was lifted to a 10-day high around 1.4325 after selling by a U.S. bank and a U.K. clearing bank in the EUR/GBP cross took out stops in the 1.4305-1.4315 area. The cross itself dipped to an intraday low around 0.6140.
The U.K. CIPS manufacturing index for July slipped to a reading of 47.0 in July from 47.3 in June, with little impact. The CBI's July retail sales survey continued to reflect the buoyant U.K. consumer sector, the balance of retailers reporting present sales volumes above those of a year ago, rising to a positive balance of 44% from 30% in June.
The outlook is slightly bullish.

Support: 1.4248 (overnight low), 1.4212 (100-day moving average), 1.3911 (June 20 low), 1.3688 (June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4327 (overnight high), 1.4349 (July 20 peak), 1.4414 (May 21 peak).