By Jim Cote //
Chicago, Aug. 7 (BridgeNews) - The euro slumped to a one-week low of 87.53 cents in early European trading after falling below technical resistance at Monday's dollar highs and a key Fibonacci retracement level. Weak euro-zone economic data and the better-than-expected U.S. productivity growth, which re-accelerated in the second quarter to 2.5%, helped the dollar. The dollar is mired amid option strikes at 124.00 yen as cappers and peggers fight for that prize.

Sterling/dollar fell to a 20-day low of 1.4128, dollar/Swiss franc rose to a six-day high and dollar/yen continued its consolidation around the 124.00 Gann 50-point pivot. Dollar/Canada will continue to unfold its swerves between 1.5251 and 1.5416 before traders can identify new leads.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 123.84 123.92 -0.08 123.67 124.14
EUR/USD 0.8769 0.8816 -0.0047 0.8754 0.8818
EUR/JPY 108.62 109.28 -0.66 108.39 109.33
GBP/USD 1.4156 1.4179 -0.0023 1.4128 1.4191
USD/CHF 1.7163 1.7095 0.0068 1.7096 1.7216
USD/CAD 1.5267 1.5249 0.0018 1.5255 1.5279
AUD/USD 0.5152 0.5174 -0.0022 0.5146 0.5182

USD/JPY was lifted in a reflection of general U.S. dollar strength to an intraday high of 124.14. There was a report from the Kyodo news agency that Japanese Finance Minister Masajuro Shiokawa said he hoped monetary policy would ease.
Earlier, USD/JPY drifted lower within a 123.65-123.90 range as bids from a U.S. investment bank countered selling from Japanese banks. Dealers reported hedging relating to a range of options with 124 strikes and Tuesday expiries trapping the pair in a range. Japanese household spending fell 3.8% year-on-year in June and 3.6% year-on-year in Q2.
The outlook is neutral.

Support: 123.67 (overnight low), 123.06 (60-day moving average), 122.70 (July 20 trough), 122.50 (Gann 50-point pivot; targets: 122.00/123.00).
Resistance: 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 124.13 (20-day moving average), 124.14 (overnight high), 125.50 (Gann 50-point pivot; targets: 125.00/126.00), 126.15 (July 6 high; 3-month high).

EUR/USD was sent to a 1-week low of 0.8753 after technical resistance at Monday's U.S. dollars highs and the key 38.2% Fibonacci retracement level of the June-October downtrend was taken out at 0.8790.
The lack of expected bids around the 0.8770 area from a U.S. investment bank undermined EUR/USD in particular. However, prices rebounded from early lows to levels near that point.
German unemployment rose for the seventh straight month in July, in line with leaks over the weekend, while German industrial production fell a smaller than forecast 0.4% month-on-month in June.
The market is awaiting the release of U.S. Q2 productivity and unit labor cost data at 1230 GMT, plus U.S. June consumer credit data at 1900 GMT. The outlook is neutral at present levels.

Support: 0.8754 (overnight low), 0.8715 (20-day moving average), 0.8350 (July 6 low; 7-month low).
Resistance: 0.8790 (38.2% Fibonacci retracement level of the June-October downtrend), 0.8818 (overnight high), 0.8848 (61.8% Fibonacci retracement level of the Nov. 27-Jan. 5 uptrend), 0.8875 (Aug. 3 high; 2 1/2-month high).

EUR/JPY fell to an 8-day early low of 108.45 after stops were taken out in the 108.70 area.
German unemployment rose a seasonally adjusted 11,000 in July, while German industrial production fell a smaller than forecast 0.4% month-on-month in June. The data had no impact.
The outlook is bearish.

Support: 108.45 (overnight low), 108.21 (20-day moving average), 107.45 (100-day moving average), 106.00 (60-day moving average), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 105.59 (200-day moving average), 104.54 (June 20 low).
Resistance: 109.33 (overnight high), 110.15 (Aug 2 high; 3-month peak), 111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend).

GBP/USD slid to a 20-day low of 1.4128 but losses were limited by the weakness in the euro, against which sterling gained. Support appeared at the 60-day moving average.
U.K. retail sales continued to march ahead in July, with like-for-like growth picking up to 6.1% from 5.6% in June, according to the latest Retail Sales Monitor published by the British Retail Consortium. Total sales growth rose to 8.4% from 7.8%. However, the BRC said the figures could yet be undermined if consumer confidence were to fall.
The outlook is neutral.

Support: 1.4128 (overnight low), 1.4135 (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: 1.4191 (overnight high), 1.4208 (100-day moving average), 1.4353 (Aug. 2 high; 2 1/2-month peak), 1.4414 (May 21 peak).