DJ ASIA DAILY FOREX OUTLOOK -

Majors
Wed May 26 19:41:00 EDT 2010

SINGAPORE (Dow Jones)--Following are expected trading ranges and outlooks for nine major
currency pairs today:

Immediate Range Larger Range

USD/JPY 89.72-90.38 89.24-90.67
EUR/USD 1.2143-1.2242 1.2000-1.2388
AUD/USD 0.8188-0.8321 0.8065-0.8388
NZD/USD 0.6602-0.6742 0.6559-0.6786
GBP/USD 1.4343-1.4442 1.4329-1.4528
USD/CHF 1.1510-1.1623 1.1486-1.1697
USD/CAD 1.0605-1.0746 1.0577-1.0851
EUR/JPY 108.83-111.95 106.76-114.05
EUR/GBP 0.8439-0.8507 0.8425-0.8585

(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 bearish bias. Pair undermined by selling of yen crosses as risk
appetite diminished (VIX fear gauge up 1.18% to 35.02 overnight) after U.S. stocks fell into
negative territory late in session (DJIA off 0.69%) despite upbeat U.S. data: April durable goods
orders jumped 2.9% (vs +2.2% expected), April new home sales surged 14.8% (vs +3.4%
expected). USD/JPY also undermined by Japan exporter sales, continuing worries over European
fiscal and economic problems, FT report China reviewing its euro-zone debt holdings,
geopolitical tensions in Korean peninsula. But USD/JPY losses tempered by higher U.S.
Treasury yields, USD demand for import settlements. Data focus: 2350 GMT Japan April
provisional trade statistics, 1230 GMT U.S. 1Q GDP (preliminary), 1230 GMT U.S. May 22
weekly jobless claims, 1500 GMT May Kansas City Fed manufacturing activity index, 1600
GMT April Chicago Fed Midwest manufacturing index, 1840 GMT Fed's Bullard speaks.
USD/JPY daily chart negative-biased as MACD in bearish mode, stochastics turning bearish.
Support at 89.72 (hourly chart); breach would expose downside to 89.24 (Tuesday's low), then
88.98 (May 20 low), 87.95 (May 6 low) and 87.33 (Dec. 9 reaction low). Resistance at 90.38
(hourly chart); breach would target 90.67 (yesterday's high), then 90.75 (Monday's high), 91.88
(May 20 high) and 92.15 (May 19 high).

EUR/USD - to trade lower. Pair undermined by growing worries euro-zone sovereign-debt crisis
would spill into region's financial sector, FT report China was meeting with foreign bankers to
review its holdings of euro-zone debt; also, WSJ story said Spanish bank BBVA could face
difficulty in financing $1 billion in debt; contrasting U.S./euro-zone economic picture suggesting
Federal Reserve likely to raise interest rates sooner than ECB - even if first hike is far off. Data
focus: Germany May provisional CPI. EUR/USD daily chart negative-biased as MACD &
stochastics bearish. Support at 1.2143 (May 19 4-year low); breach would expose downside to
psychological 1.2000, then 1.1823 (Feb. 27, 2006 reaction low), 1.1775 (Dec. 30, 2005 reaction
low) and 1.1638 (Nov. 17, reaction low). Resistance at 1.2242 (hourly chart); breach would
expose upside to 1.2388 (Tuesday's high), then 1.2559 (Monday's high), 1.2672 (Friday's 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, worries euro zone's sovereign-debt crisis could
threaten banks within monetary union, tensions in Korean peninsula. But AUD/USD losses
tempered by Aussie-U.S. yield gap, stronger commodity prices (CRB spot index ended up 4.04
yesterday at 252.83). Data focus: 0130 GMT Australia 1Q private new capital expenditure &
expected expenditure. AUD/USD daily chart mixed as MACD bearish, but stochastics bullish at
oversold. Support at 0.8188 (yesterday's low); breach would expose downside to 0.8065
(Tuesday's 10-month low), then psychological 0.8000, 0.7825 (50% Fibonacci correction of
0.6245-0.9405 Feb. 2, 2009-Nov. 16, 2009 advance) and 0.7700 (July 13, 2009 reaction low).
Resistance at 0.8321 (hourly chart); breach would expose upside to 0.8388 (yesterday's high),
then 0.8498 (May 20 high), 0.8637 (May 19 high) and 0.8684 (previous base set May 17).

NZD/USD - to consolidate with risks skewed lower. Pair undermined by unwinding of long-
NZD carry trades on higher risk aversion, growing fears of spillover of euro zone's sovereign-
debt crisis, geopolitical tensions in Korean peninsula. But NZD/USD losses tempered by Kiwi-
U.S. yield advantage, stronger commodity prices, larger NZ April trade surplus of NZ$656
million (vs NZ$490 million consensus forecast). NZD/USD daily chart negative-biased as
MACD bearish, while stochastics stay suppressed at oversold, suggesting sideways or lower
NZD/USD trading near-term. Support at 0.6602 (yesterday's low); breach would expose
downside to 0.6559 (Tuesday's 9-month low), then 0.6470 (July 30, 2009 reaction low) and
0.6262 (50% Fibonacci retracement of advance from March 4, 2009 low of 0.4890 to Oct. 21
high of 0.7634). Resistance at 0.6742 (yesterday's high); breach would expose upside to 0.6786
(Monday's high), then 0.6817 (Friday's high), 0.6876 (May 20 high), 0.6913 (previous base set
May 17) and 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, persistent worries over euro-zone debt crisis,
geopolitical tension in Korean peninsula, concerns about long period of slow UK economic
growth as government seeks to cut budget deficit. Data focus: 1000 GMT UK May CBI quarterly
distributive trades survey. GBP/USD daily chart negative-biased as MACD bearish, while
stochastics stay suppressed at oversold, suggesting sideways or lower GBP/USD trading near-
term. Support at 1.4343 (hourly chart), then at 1.4329 (yesterday's low); breach would expose
downside to 1.4257 (Tuesday's low), then 1.4230 (May 20 14-month low), 1.4108 (March 30,
2009 reaction low) and psychological 1.4000 level. Resistance at 1.4442 (yesterday's high);
breach would expose upside to 1.4528 (Monday's high), then 1.4546 (May 17 high), 1.4638
(May 14 high) and 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 higher risk aversion. Daily chart positive-
biased as MACD bullish, while stochastics stay elevated at overbought, suggesting sideways or
higher USD/CHF trading near-term. Resistance at 1.1623 (yesterday's high); breach would
expose upside to 1.1697 (Tuesday's 13-month high), then 1.1740 (April 20, 2009 reaction high)
and 1.1965 (March 12, 2009 reaction high). Support at 1.1510 (yesterday's low); breach would
target 1.1486 (Monday's low), then 1.1447 (Friday's low), 1.1420 (May 19 low) and 1.1267
(May 18 low).

USD/CAD - to consolidate with risks skewed higher. Pair underpinned by increased investor risk
aversion, stronger global USD, uncertainty whether BOC will raise rates Tuesday as euro-zone
debt worries offset recent upbeat Canada data. But USD/CAD gains tempered by stronger
commodity and oil prices (Nymex crude settled up $2.76 yesterday at $71.51/bbl). USD/CAD
daily chart positive-biased as MACD bullish, while stochastics stay elevated at overbought,
suggesting sideways or higher USD/CAD trading near-term. Resistance at 1.0746 (yesterday's
high); breach would expose upside to 1.0851 (Tuesday's 7-month high), then 1.0869 (Nov. 2
reaction high) and 1.0992 (Sept. 28, 2009 reaction high). Support at 1.0605 (hourly chart), then
at 1.0577 (yesterday's low); breach would target 1.0529 (Monday's low), then 1.0416 (May 20
low), 1.0383 (May 19 low) and 1.0245 (May 18 low).

EUR/JPY - to trade with risks skewed lower. Cross undermined by unwinding of carry trades
amid increased risk aversion, worries over euro-zone's fiscal and economic problems, tensions
between North and South Koreas. Daily chart negative-biased as MACD & stochastics bearish,
although latter at oversold. Support at 108.83 (Tuesday's 8.5-year low); breach would expose
downside to 106.76 (Nov. 8, 2001 reaction low), then 105.45 (Sept. 4, 2001 reaction low).
Resistance at 111.95 (yesterday's high); breach would expose upside to 114.05 (Monday's high),
then 114.40 (Friday's high), 115.49 (May 18 high) and 117.00 (May 14 high).

EUR/GBP - to trade with risks skewed to downside. Daily chart negative-biased as stochastics in
bearish mode, MACD turning bearish, bearish parabolic stop-and-reverse signal hit at 0.8497
yesterday. Support at 0.8443-0.8439 band (May 12 low-May 7 low); breach would target 0.8425
(May 6 low), then 0.8397 (June 22, 2009 trough) and 0.8230 (Nov. 27, 2008 reaction low).
Resistance at 0.8507 (hourly chart); breach would expose upside to 0.8585 (Tuesday's high),
then 0.8674 (Monday's high), 0.8773 (Friday's high) and 0.8807 (May 7 high).

Disclaimer
(This article is general financial information, not personalized investment advice, as it does not
consider the unique circumstances affecting an individual reader's decision to buy or sell a
specific security. Dow Jones does not warrant the accuracy, completeness or timeliness of the
information in this article, and any errors will not be made the basis for any claim against Dow
Jones. The author does not invest in the instruments or markets cited in this article.)