Forex - Dollar gained despite firmer US crude futures and weaker Gold

Forex News and Events: The Dollar rose on Monday, as weak euro zone data took the steam out of last week's Euro rally and investors braced for a Federal Reserve statement this week that will likely focus on rising US inflation pressures. The Fed's inflation mindset when it announces its monetary policy decision on Wednesday should ensure that US interest rates will remain unchanged after a string of cuts since mid-September, analysts said. Monday reports showed high energy costs had soured German business sentiment and the euro zone's manufacturing and service sectors contracted in June, denting the case for higher euro zone interest rates and punishing the Euro across the board. The Fed is expected to hold rates at 2% on Wednesday but the futures markets have priced in a pair of rate hikes by year end due to surging energy and food price inflation. Unlike the Fed, the European Central Bank has signaled a rate hike in July, though officials have been at pains to make clear that this would not necessarily lead to a series of hikes. EurUsd fell 0.53% at 1.5522, its largest daily loss in about two weeks. UsdChf rose 0.92% to 1.0452. UsdJpy rose 0.5% to 107.88, boosted after a Japanese government survey of large manufacturers showed sentiment deteriorated in the second quarter. GbpUsd fell 0.58% to 1.9645. The Dollar has gained despite firmer commodities on Monday. US crude futures were up more 1% at $137.36 on Nigerian supply disruptions and escalating tensions between Israel and Iran. Gold fell 1.94% at 883.35 extending last week sell-off as investors took more profits on the back of a rebounding Dollar.

Today's Key Issues (time in GMT): 06:00 EUR July Germany GfK consumer sentiment 4.6 vs 4.9 06:45 EUR June Business climate 101 vs 102 06:45 EUR May Consumer spending 0.7% vs -0.8% 07:30 DKK June Consumer confidence -4 vs -3.5 14:00 USD June Consumer confidence 56.4 vs 57.2 21:00 USD weekly ABC CCI -43 vs -44 23:50 JPY May Exports 1.9% vs 4% 23:50 JPY May Imports 8.4% vs 11.9% 23:50 JPY May Trade Balance 40B vs 485B 23:50 JPY May Trade Balance -74.7 vs -46.3 (YoY)

The Risk Today: EurUsd Current trading range 1.5400 to 1.5800. Renewed weakness below 1.5400 will put the current light 2-month uptrend on hold. This may open way down to 1.5000 key level. Support holds 1.5304 13th June low. On the upside, initial resistance holds 1.5844 June 9th high. This would reopen the way up to 1.6000 Pivot point resistance ahead of key resistance 1.6200 market target. GbpUsd Cable is still consolidating in 1.9400 – 1.9800 trading range. On the upside, psychological 2.0000 level stays into focus. On the downside, a reversal below 1.9600 might bring again focus on 1.9337 January low and 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Strong support holds 1.9363 20th February and 14th May low. UsdJpy Current 3-month uptrend holds but stays under 108.59 16th June high. Further advance would put 110.10 strong resistance (Trendline) into focus and mid January double top ahead of 111.92 early January high. Any profit taking to and return lower than 105 level might send the market back down to 100 – 104 consolidation trading range. Strong support hold 106.59 former resistance (38.2% retracement of 124.15 – 95.74 decline). UsdChf Market is currently trading in 1.0200-1.0600 range. Early January double top 1.1191 marks strong resistance. Minor support holds 1.0305 Friday low. Initial support holds 1.0148 June 9th low. Further weakness may open the way toward 0.9637 17th March low. June 13th 1.0541 high holds initial resistance.

Resistance and Support: EURUSD GBPUSD USDJPY USDCHF 1.6200 T 2.0100 P 111.92 K 1.1191 K 1.6000 K 1.9800 S 110.10 T 1.0625 T 1.5844 M 1.9688 M 108.39 M 1.0541 M 1.5500 1.9630 108.10 1.0465 1.5304 M 1.9363 S 106.59 S 1.0305 M 1.5285 S 1.9337 T 104.44 M 1.0000 P 1.5000 K 1.9105 K 100.00 P 0.9637 K S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot