Cornelius Luca
New York, Aug. 20 (BridgeNews) - The U.S. dollar opens the week on a firm tone amid short covering as traders feared being caught overexposed by the FOMC meeting results on Tuesday. The Federal Reserve is expected to trim rates by 25 basis points to boost the sagging economy. The euro fell from 92.03 cents after failing to best the five-month high reached on Aug. 16 despite a better-than-expected June industrial production for the euro zone. The indicator rose 0.6% from May and rose 1.4% from June 2000 after three months of declines in output.

Dollar/yen reversed light losses but remained within Friday's range, sterling/dollar slipped within an inside range, dollar/Swiss climbed into positive territory from a fresh five-month low of 1.6508, while dollar/Canada hit a one-month high of 1.5471.
Traders will likely extend the position squaring process unperturbed by the release of the July leading economic indicators at 1000 ET.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 120.55 120.24 0.31 120.10 120.58
EUR/USD 0.9144 0.9182 -0.0038 0.9136 0.9203
EUR/JPY 110.22 110.35 -0.13 110.05 110.63
GBP/USD 1.4446 1.4454 -0.0008 1.4437 1.4470
USD/CHF 1.6606 1.6565 0.0041 1.6508 1.6622
USD/CAD 1.5458 1.5430 0.0028 1.5423 1.5471
AUD/USD 0.5327 0.5354 -0.0027 0.5328 0.5375

USD/JPY's gains were supported by the Nikkei 225 Stock Average index's 1.6% slump Monday, which sent it to another new post-bubble closing low of 11,257.94. The local shares broadly came under heavy pressure following U.S. shares' tumble on Friday.
The pair will trade between 2 Gann 50-point pivots at 119.65 and at 121.05.

Support: 120.10 (overnight low), 119.65 (Gann 50-point pivot; targets: 119.15/120.15), 119.05 (Aug. 15 low; 2-month low), 119.00 (38.2% Fibonacci retracement level of the August 1998-December 1999 downtrend), 118.30 (June 1 low; 3-month low), 118.25 (Gann 50-point pivot; targets: 117.75/118.75).
Resistance: 120.57 (overnight high), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 122.90 (100-day moving average), 122.85 (20-day moving average), 123.01 (60-day moving average), 124.00 (Gann 50-point pivot; targets: 123.50/124.50).

EUR/USD fell after matching Aug. 16's 5-month high of 0.9203 but found support at 0.9136 from the 61.8% Fibonacci retracement level of the June-October downtrend. The fundamental support of the euro-zone industrial production data was eroded by the ongoing declining employment in large Italian industrial companies. The May figure fell by a seasonally adjusted 0.3% from April and dropping an annual unadjusted 2.4%.
The EUR/USD outlook is mixed.

Support: 0.9136 (overnight low; 61.8% Fibonacci retracement level of the June-October downtrend), 0.8963 (50% Fibonacci retracement level of the June-October downtrend), 0.8915 (200-day moving average), 0.8897 (20-day moving Average).
Resistance: 0.9203 (overnight high; Aug. 16 high; 5-month high), 0.9382 (March 2 peak), 0.9446 (Feb. 1 peak), 0.9595 (Jan. 5 high; six-month peak).

EUR/JPY was dragged down from a 3 1/2-month high of 110.63 by a slumping EUR/USD. It's too early to tell whether the cross currency will extend its losses within the rising channel.
The intraday outlook is mixed.

Support: 109.53 (overnight low), 109.17 (20-day moving average), 107.44 (100-day moving average), 106.56 (60-day moving average), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 106.43 (200-day moving average).
Resistance: 110.63 (overnight high; 3 1/2-month high), 111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend), 113.71 (April 4 high; 17-month high).

GBP/USD traded once again within Thursday's range as traders searched for new leads. The U.K. economic data carried little weight Monday.
The global goods trade deficit swelled to a record 3.2 billion sterling in June, showing yet again the imbalances in the economy being antagonized by strong domestic demand and a weakening global economy.
The outlook is neutral.

Support: 1.4437 (overnight low), 1.4283 (20-day moving average), 1.4213 (100-day moving average), 1.4144 (60-day moving average), 1.3911 (June 20 low), 1.3688 (June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4470 (overnight high), 1.4517 (Aug.16 high; 5-month peak), 1.4560 (61.8% Fibonacci retracement of January-June downtrend), 1.4756 (March 2 peak), 1.5100 (Jan. 8 peak, year high).