Jim Cote //
Chicago, Aug. 28 (BridgeNews) - The dollar gained against all major currencies in early trade. The yen fell after Japanese Finance Minister Masajuro Shiokawa said that Japan wants a weak yen. The Nikkei hit a new post-bubble low. The euro fell as money supply in the euro zone expanded 6.4% in July, more than financial markets expected, the European Central Bank announced. At 1000 ET, the Conference Board August consumer confidence report (July: 116.5) will be released.

The Canadian dollar opened weaker Tuesday at C$1.5436 to the U.S. dollar as desks squared positions before the Bank of Canada's scheduled policy announcement at 0900 ET this morning. The European currencies declined against the dollar, while the key levels for dollar/yen continue to border at 119.65 and 121.05.

USD/JPY came off its high of 120.49 and eased back to 120.20-25 on selling from Japanese exporters, according to dealers. Offers at 120.50 discouraged further upward momentum of the pair. There is talk that a good amount of options with a strike price of 120.00 will expire at the NY cut Tuesday. Some dealers expect USD/JPY to hover around the 120.00 level though the expiry, because of expected delta hedge operation.
The Nikkei hit a new post-bubble low. Also providing some downward pressure are declines in EUR/JPY.
USD/JPY had moved slightly higher after Japanese Finance Minister Shiokawa said that Japan wants a weak yen. The comment caused some USD/JPY buying from inter-bank dealers to push it back to above 120.00.
Japan's July adjusted jobless rate at 5.0%, hitting record high. ( story .1584 )
The outlook is bullish.

Support: 119.70 (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: 120.50 (overnight high), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 122.60 (100-day moving average), 123.02 (60-day moving average), 121.60 (20-day moving average), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 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).

EUR/USD fell as money supply in the euro zone expanded 6.4% in July, more than financial markets expected, the European Central Bank announced. However the data reflect distortions also seen in June when annual expansion was 6.1%, the ECB said. The three-month moving average at 5.9% was closer to the ECB target for M3 at 4.5%.
Market analysts had expected M3 in July would be close to the 6.1% rate for June.
"This (July) increase may partly reflect the current relatively flat yield curve and the recent weakness in stock markets, which made the holdings of short-term deposits and marketable instruments included in M3 more attractive," the ECB said.
The outlook is bearish.

Support: 0.9035 (overnight low), 0.9136 (61.8% Fibonacci retracement level of the June-October downtrend), 0.9080 (Aug. 21 low), 0.8963 (50% Fibonacci retracement level of the June-October downtrend), 0.8932 (200-day moving average), 0.9003 (20-day moving average).
Resistance: 0.9118 (overnight high), 0.9240 (Aug. 22 high; 5-month high), 0.9382 (March 2 peak), 0.9446 (Feb. 1 peak), 0.9595 (Jan. 5 high; six-month peak).

EUR/JPY fell on the euro weakness.
The outlook is bearish.

Support: 108.65 (overnight low), 107.28 (100-day moving average), 107.31 (60-day moving average), 107.28 (100-day moving average), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 104.54 (June 20 low).
Resistance: 109.58 (overnight high), 110.63 (Aug 20 high; 3 1/2-month peak), 111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend), 113.71 (April 4 high; 17-month high).

GBP/USD slid in line with the euro.
The outlook is bearish.

Support: 1.4381 (overnight low), 1.4345 (20-day moving average), 1.4384 (200-day moving average), 1.3911 (June 20 low), 1.3688 (June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4437 (overnight high), 1.4560 (61.8% Fibonacci retracement of January-June downtrend), 1.4584 (Aug. 22 high; 5-month high), 1.4756 (March 2 peak), 1.5100 (Jan. 8 peak, year high).