The dollar sank versus the European currencies on Monday on relief that the G8 meeting went quietly out of the way, but dollar/yen advanced. More of the same is likely today, but take some cues from the US PPI, housing and industrial production reports.

Euro/dollar
The euro/dollar should recover further today and it won't take much to turn my model long.

Immediate resistance now comes at 1.5518. Above 1.5570, euro/dollar has strong resistance at 1.5645.

Immediate support is seen at 1.5417. Below 1.5340, support comes at 1.5287. Distant support moved to 1.5230.

Oscillators are declining.

NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish

Dollar/yen
Dollar/yen rallied to a new four-month high and my model remains long. The pair closed little changed, so it is overbought. Take profit only on a confirmation.

Above 108.60, resistance is still seen at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Above 109.93, distant resistance is perched at 110.35 from another 50-point pivot, which targets 109.85 and 110.85.

Initial support is seen at 107.95 from a 50-point pivot, which targets 107.45 and 108.45. Next strong level is at 106.75 from another 50-point pivot, which targets 106.25 and 107.25.

Oscillators are rising.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed

Sterling/dollar
Sterling/dollar rallied sharply on Monday on concern about inflation and my model went long. The short-term outlook is mixed to slightly higher, as the most strength has probably been seen.

Above 1.9687, strong resistance is now seen at 1.9760. Further resistance is perched at 1.9850.

Immediate support comes at 1.9585. The next level is 1.9500. Further support comes at 1.9410.

Oscillators are rising.

NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Mixed
LONG-TERM: Mixed

Dollar/Swiss franc
Dollar/Swiss ended marginally lower but got stuck to an inside range. The model is (barely) long. Only a close above 1.0548 signals further strength, but choppy to lower trading is likely.

Below 1.0400, support is still seen at 1.0375. This important level is followed by 1.0310. Distant support is at 1.0200.

Initial resistance remains at 1.0500. Key resistance is at 1.0548. This is followed by 1.0622.

Oscillators are rising.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish