DJ ASIA DAILY FOREX OUTLOOK -

Majors
Sun May 30 19:42:00 EDT 2010
SINGAPORE (Dow Jones)--Following are expected trading ranges and outlooks for nine major
currency pairs today:

Immediate Range Larger Range

USD/JPY 90.58-91.41 89.79-91.88
EUR/USD 1.2201-1.2380 1.2143-1.2452
AUD/USD 0.8426-0.8493 0.8335-0.8551
NZD/USD 0.6752-0.6798 0.6700-0.6861
GBP/USD 1.4366-1.4494 1.4329-1.4610
USD/CHF 1.1521-1.1596 1.1476-1.1655
USD/CAD 1.0439-1.0560 1.0401-1.0595
EUR/JPY 111.33-112.50 110.40-113.67
EUR/GBP 0.8442-0.8547 0.8419-0.8585

(Ranges are calculated using recent high and lows, information on the placement of option
strikes, and technical analysis - Fibonacci levels, trendlines and moving averages.)

USD/JPY - to consolidate with risks skewed lower. Trading conditions likely thin as markets in
U.S. & U.K. closed for holiday. USD/JPY weighed by unwinding of JPY-funded carry trades on
inflamed investor risk aversion (VIX fear gauge up 8.05% at 32.07), weak U.S. stocks Friday
(DJIA down 1.19%) as disappointing U.S. economic data (April consumer spending flat vs
forecast for +0.1%; Chicago business barometer fell to 59.7 in May from 63.8 in April vs 62.0
expected) added to anxiety about pace of economic recovery, while Fitch's downgrade of Spain's
debt rating rekindled investors' fears about European credit. USD/JPY also undermined by Japan
exporter sales, lower U.S. Treasury yields; but losses tempered by USD demand for import
settlements. Data focus: 2350 GMT Japan April preliminary industrial production, provisional
trade statistics for first 10 days of May, 0025 GMT Fed Chairman Bernanke speaks, 0110 GMT
Fed's Evans holds press briefing, 0500 GMT Japan April housing starts, April construction
orders. USD/JPY daily chart mixed as stochastics in bullish mode, MACD bearish. Support at
90.58 (Friday's low); breach would expose downside to 89.79 (Wednesday's low), then 89.24
(Tuesday's low), 88.98 (May 20 low) and 87.95 (May 6 low). Resistance at 91.41 (Friday's high);
breach would expose upside to 91.88 (May 20 high), then 92.15 (May 19 high) and 92.41 (55-
day moving average).

EUR/USD - to consolidate with risks skewed lower. Pair hurt by Fitch cutting Spain's AAA
credit rating by a notch despite last week's passage of austerity measures by Spanish
government; worries over euro-zone economic slowdown as governments adopt fiscal
contraction measures to rein in yawning deficits. Data focus: ECB Chief Trichet speeches at
0030 GMT & 0800 GMT, 0800 GMT April euro area monetary developments (M3), 0900 GMT
May euro area flash estimate inflation, euro-zone May business climate indicator & economic
sentiment indicator, 1300 GMT ECB's Papademos holds press briefing. EUR/USD daily chart
mixed as MACD in bullish mode, but stochastics still suppressed at oversold. Support at 1.2201
(hourly chart); breach would expose downside t0 1.2152-1.2143 band (Thursday's low-May 19
4-year low), then psychological 1.2000, 1.1823 (Feb. 27, 2006 reaction low) and 1.1775 (Dec.
30, 2005 reaction low). Resistance at 1.2380 (hourly chart); breach would expose upside to
1.2452 (Friday's high), then 1.2559 (May 24 high), 1.2672 (May 21 high) and 1.2684 (May 13
high).

AUD/USD - to consolidate with risks skewed lower. Pair undermined by unwinding of long-
AUD carry trades on heightened risk aversion, contagion from weak EUR, softer commodity
prices (CRB spot index ended down 2.92 Friday at 254.8), expectations RBA will be on hold at
tomorrow's meeting. But AUD/USD losses tempered by Aussie-U.S. yield gap. Data focus: 0100
GMT Australia May TD Securities monthly inflation gauge, 0130 GMT 1Q balance of
payments, 1Q international investment position, April financial aggregates (including private
sector credit), 0630 GMT Australia April international reserves. AUD/USD daily chart mixed as
MACD bearish, but stochastics in bullish mode. Support at 0.8426 (Friday's low); breach would
expose downside to 0.8335 (hourly chart), then 0.8188 (Wednesday's low), 0.8065 (Tuesday's
10-month low) and psychological 0.8000. Resistance at 0.8493 (hourly chart); breach would
expose upside to 0.8551 (Friday's high), then 0.8576 (previous base set Feb. 5), 0.8637 (May 19
high) and 0.8714 (previous base set May 6).

NZD/USD - to consolidate with risks skewed lower. Pair undermined by unwinding of long-
NZD carry trades on elevated risk aversion, softer commodity prices, contagion from weak EUR.
But NZD/USD losses tempered by Kiwi-U.S. yield advantage, expectations RBNZ will being
increasing policy rate from 2.5% at its June meeting. Data focus: 0300 GMT NZ May NBNZ
business outlook. NZD/USD daily chart mixed as MACD bearish, but stochastics in bullish
mode. Support at 0.6752 (Friday's low); breach would expose downside to 0.6700 (hourly chart),
then 0.6623 (Thursday's low), 0.6602 (Wednesday's low) and 0.6559 (Tuesday's 9-month low).
Resistance at 0.6798 (hourly chart), then at 0.6861 (Friday's high) and 0.6876 (May 20 high);
breach would expose upside to 0.6913 (previous base set May 17), then 0.7039 (May 18 high).

GBP/USD - to trade with risks skewed lower. Pair undermined by capital flight to safe-haven
USD on heightened investor risk aversion, concerns about long period of slow UK economic
growth as government adopts fiscal tightening measures; comments from PM Cameron that
reducing government borrowing would keep UK interest rates lower for longer; contagion from
weak EUR. GBP/USD daily chart still positive-biased as MACD & stochastics in bullish mode.
Support at 1.4366 (Thursday's low); breach would expose downside to 1.4329 (Wednesday's
low), then 1.4257 (Tuesday's low), 1.4230 (May 20 14-month low) and 1.4108 (March 30, 2009
reaction low). Resistance at 1.4494 (hourly chart); breach would expose upside to 1.4610
(Friday's high), then 1.4638 (May 14 high), then 1.4916 (May 13 high).

USD/CHF - to consolidate with risks skewed higher. Pair underpinned by broadly stronger USD
undertone, expectations of more CHF-selling intervention by SNB. But USD/CHF topside
limited by unwinding of short-CHF carry trades on negative risk sentiment; 3.2% surge in Swiss
April exports, surprise rise in Swiss KOF economic barometer to 40-month high of 2.16 in May
from 2.05 in April (against forecast for fall to 2.02), feeding expectations SNB may hike rates in
September. Daily chart mixed as MACD bullish, but stochastics bearish at overbought.
Resistance at 1.1596 (Friday's high); breach would expose upside to 1.1655 (Thursday's high),
then 1.1697 (Tuesday's 13-month high) and 1.1740 (April 20, 2009 reaction high). Support at
1.1521 (hourly chart); breach would target 1.1476 (Friday's low), then 1.1447 (May 21 low),
1.1420 (May 19 low) and 1.1267 (May 18 low).

USD/CAD - to range-trade. Pair underpinned by increased investor risk aversion, stronger global
USD, weaker commodity and oil prices (Nymex crude settled down 58 cents Friday at
$73.97/bbl). But USD/CAD gains tempered by expectations BOC will hike rates by 25 bps
tomorrow to 0.50% (all 12 economists polled by Dow Jones Newswires predict rate hike). Data
focus: 1230 GMT Canada 1Q GDP, March GDP, April industrial & raw materials prices.
USD/CAD daily chart mixed as MACD bullish, but stochastics in bearish mode. Resistance at
1.0560 (Friday's high), then at 1.0595 (hourly chart); breach would expose upside to 1.0718
(Thursday's high), then 1.0746 (Wednesday's high) and 1.0851 (Tuesday's 7-month high).
Support at 1.0439 (Friday's low), then at 1.0401 (hourly chart); breach would expose downside
to 1.0329 (100-day moving average), then 1.0240 (May 18 low) and 1.0220 (55-day moving
average).

EUR/JPY - to trade with risks skewed lower. Cross undermined by unwinding of carry trades
amid increased risk aversion, pessimism from euro-zone debt crisis. Daily chart mixed as MACD
bearish, but stochastics bullish at oversold. Support at 111.33 (Friday's low); breach would
expose downside to 110.40 (hourly chart), then 109.19 (Thursday's low), 108.83 (Tuesday's 8.5-
year low), 106.76 (Nov. 8, 2001 reaction low) and 105.45 (Sept. 4, 2001 reaction low).
Resistance at 112.50 (hourly chart); breach would expose upside to 113.67 (Friday's high), then
114.05 (May 24 high), 114.40 (May 21 high) and 115.49 (May 18 high).

EUR/GBP - to range-trade. Daily chart mixed as stochastics in bearish mode, MACD neutral.
Resistance at 0.8547 (Friday's high); breach would expose upside to 0.8585 (Tuesday's high),
then 0.8674 (May 24 high), 0.8773 (May 21 high) and 0.8807 (May 7 high). Support at 0.8442
(Friday's low), then at 0.8419 (Thursday's low); breach would target 0.8397 (June 22, 2009
reaction low), then 0.8230 (Nov. 27, 2008 reaction low).