EUROPEAN session review: Dollar continues to rise

The Dollar rose versus the main currencies, continuing a correction move started on Friday. 

According to rumours, Germany GDP report will be much better then expected. The report will be published on Wednesday. Source of information prefered to stay anonimous.

EURO:

The euro stays under pressure as US dollar gains accross the board. 

EUR/USD has tested support at 1.3290. There is some buying interest in this area. A breakdown of 1.3260 would open the door to 1.3220. The initial resistance area is at 1.3400/20. Further - at 1.3460.

POUND:

The pound is stabilised near session minimums. 

GBP/USD has tested support at $1.5480 (Jul 8 lows). Below bears may drag the rate down to $1.5400/90 (recent lows) and $1.5300. Initial resistance comes at $1.5600 (May highs and channel line from Jul 9).

YEN:

The yen dropped versus dollar after the key economic adviser to Mr. Abe, Yale University Professor Mr. Koichi Hamada said about his disappointment on the latest Japanese growth figures. 

The policy maker, though to be one of the most influential figures to Japan's PM Mr. Abe, said there is no need to hurry with the sales tax hike after the weaker-than-expected Q2 GDP. Mr. Hamada, who has been supporting the idea of implementing an incremental approach to the sales tax increase, added that raising sales tax as planned might harm the economy. According to Mr. Hamada, one option might be to delay the tax hike by one year. 

USD/JPY has tested resistance at Y96.80, above - at Y97.60 (Jul 31 lows) and Y98.80. Initial support comes at Y95.80 (initial support) and remains under pressure. Below losses may widen to Y95.20 (Jun 7 lows) and Y93.80 (Jun 13 lows).

DATA AHEAD:

At 18:00 GMT US Monthly Budget Statement (Jul )is expected. ahead of UK  RICS Housing Price Balance due at 23:01 GMT and BoJ Monetary Policy Meeting Minutes at 23:50GMT 

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