Neither stale news nor fresh can stir the dollar

EUR USD (1.2870)
The recipe for Friday’s oscillations contained some very familiar ingredients: sag terror alarm on a UK airplane, evidence of robust growth in the eurozone; signs of slowing growth in the US which further diminished interest rate expectations prompted; rumours of central banks on the bid as well as on the offer; and freshly rising tensions in southern Lebanon as Israel is accused of breaking the cease-fire. By now, of course, the ability of any of these things to durably influence the trajectory of the euro had been weakened. The only new element in the mix was the lower oil price. Albeit briefly, NYMEX crude dipped below $70 for the first time in two months on Friday. However, currency market commentators have been generally slow to draw any conclusion for the dollar as a result of the falling crude prices (most of which ought to be negative anyway). Thus, the euro clung to the centre of its recent sideways range and volatility continued to languish near the year’s low.

Our near-term view remains neutral on the single-currency. Our first downside level precisely limited the dip on Friday. But demand at this 1.2785 point will be weaker now. Better bids are only to be expected starting at 1.2735. On the upside, the previous high at 1.2910 is a very visible point for the market, but only a break of 1.2940 would give a reliable signal for higher prices.

USD JPY (115.60)
The dollar was essentially immune to any news on Friday; it simply re-traded a part of the range from the previous day. Not even the Chinese rate hike could have a durable influence on the price. We maintain a neutral stance for the moment. The levels 117.05 and 116.60 ought to present obstacles to the upside in the term near-term. The first supports remain at 115.50 and at 114.70.

EUR JPY (148.90)
The near-term potential remains for slightly higher prices, now to 149.30/45. Any acceleration (150.30) to the current slow climb higher must await a break there. In case of a correction, robust support is indicated at 147.70/80 now. We would take advantage of a retreat to this demand level to open a bullish strategy whose risk-limit would be set immediately below. The critical downside point is sighted much lower at 146.50.

GBP USD (1.8860)
Continued disappointment with the Pound resulted in further weakness on Friday. We suspect that the sellers were the very same that bought on dips earlier in the week. Therefore, this stop-loss activity could already have been completed ahead of the weekend. Fortunately for Sterling, the slide stopped fractionally short of our critical support. For today, this key downside point stands at 1.8765; a violation there would indicate that a longer, deeper correction is underway to 1.8670 and then to 1.8500. To the upside, any surpass of 1.8980 can safely be treated as bullish.

AUD USD (0.7590)
Gold price weakness appears to have taken heavy toll on the AUD, which had to give back all the gains from earlier in the week. We now reckon with a near-term consolidation. We must concede that the nearby supports are rather weak, which means that the lower border of the range may not be built ahead of 0.7525/30. Overhead, resistance stands at 0.7645 and at 0.7710.