27th July, 2011 – Daily Forex Report by GFM Research

The Greenback depreciated for the second week amidst possible credit default by the US; there is a possibility that the credit rating of the world’s largest economy may be degraded from current AAA+ rating.
It seems the Dollar Index (DX) and the Dow Jones Industrials (DJIA) have decoupled yesterday wherein DJIA continued correction when the Dollar depreciated; 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, Dow Jones Industrials (DJIA) is expected to find resistance in the zone of 12700-12800 which is historical congestion zone; consistently trading above 12400 reinitiate long-term rally in DJIA, whereas weekly close below 12300 would push DJIA into range bound trading pattern.

NYMEX September Crude (CLU11) is expected to remain range bound between $95.00 and $101.50, either side breakout would establish trend.

EURUSD       1.4385          1.4435           1.4568             1.4630
USDJPY          76.90           77.30             78.20               78.80
GBPUSD        1.6330         1.6360            1.6500             1.6640
USDCHF         0.7920         0.7980           0.8200              0.8275
EURJPY         112.00         112.55           113.90              114.40
AUDUSD        1.0930         1.1010           1.1110                   –

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