2nd August, 2011 – Daily Forex Report by GFM Research

The US Dollar strengthens across the board especially against the Euro and the Cable; the Dollar Index (DXU11) finds stability again in the ranges of 74.00 after it has hit critical support of 73.40 ranges; despite the process of increasing US borrowings to the tune to $14.3 trillion sell of was witnessed in key index of the Dow Jones Industrials (DJIA).

Historic correlation between DJIA Vs DX suggests the major trend is still bearish in the Dollar Index though short covering can be expected; only weekly close above 76.70 in case of DXU11 would result in long term trend reversal in the US Dollar where as weekly close below 73.40 would result in continuation of the bear trend, the major trend in the key equity index of DJIA is capped between 11930 and 12700-12800.

NYMEX Crude October basis is capped between $100.50 and $95.00, daily close on the either side would establish further trend.

EURUSD       1.4128         1.4180            1.4330             1.4445
USDJPY          76.50          77.00              78.00               78.20
GBPUSD        1.6180        1.6230             1.6350            1.6410
USDCHF         0.7700        0.7780            0.7960             0.8000
EURJPY         108.80        109.30             112.00             112.50
AUDUSD        1.0810        1.0890             1.0980             1.1060

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