IBTimes

The AUD is suffering from a political impasse after Saturday's parliamentary election delivered the first hung parliament since World War II. No clear winner emerged from the polls, as Julia Gillard (the Labor incumbent Prime Minister) and Tony Abbott (the Liberal Opposition Leader) both failed to reach the 76 seats needed to form a government.

Japanese Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa discussed the yen and agreed to work closely in a phone conversation on Monday, but Kan did not ask the central bank to make any monetary policy changes.

Swiss M3 Money Supply rose in July by 6.5 percent, compared with the previous 7.7 percent that got revised to 7.4 percent.

The JPY advanced against all 16 major counterparts before reports this week forecast to show US existing home sales fell and Japan's export growth slowed in July. Australia's currency weakened after the election failed to deliver a majority government for the first time in 70 years. The EURUSD traded near a five-week low ahead of European data that may show growth in the EU's services and manufacturing industries fell to 56.3 (prev. 56.7).

EUR/USD Buy at 1.2707 SL 1.2675 TP 1.2784 USD/JPY Sell at 85.41 87 85.73 TP 84.69 GBP/USD Buy at 1.5554 SL 1.5522 TP 1.5642 USD/CHF Sell at 1.0341 SL 1.0373 TP 1.0257

The U.S. dollar held steady on Monday, retaining most of the gains it made late last week when growing worries about the global economy prompted investors to park funds in the world's most liquid currency, while the Australian dollar slid on political uncertainty.

UNCERTAINTY REMAINS BUT BREAKOUT EXPECTED. Still very tough trading conditions as the markets continue to be range bound. Traders have been caught in several false breakouts over the past few weeks and now that August is coming to an end, we should expect to see better direction. With the euro closing lower on Friday and setting a lower low, we expect to see continuation in favor of the dollar.

Technical Cross Report - Great British Pound vs. Japanese Yen (2010-08-23)

Technical Cross Report - Euro vs. Japanese Yen (2010-08-23)

Technical Cross Report - Euro vs. Great British Pound (2010-08-23)

USD/CHF closed higher on Friday as it consolidated some of Thursday's decline. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term.

GBP/USD closed lower on Friday as it extends this month's decline. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain neutral to bearish signalling that additional weakness is possible near-term.

USD/JPY closed higher on Friday and high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are diverging and are neutral to bullish hinting that a short-term low might be in or is near.

EUR/USD closed lower on Friday and has renewed the decline off this month's high. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are oversold, diverging but are turning bearish signalling that additional weakness is possible near-term.

The euro weakened across the board and breached below the bear flag formation against the dollar - printing a session low at 1.2662 on Friday. The uncertain outlook of the global economy will probably provide more downward bias on to growth sensitive currencies. Upside pullbacks should face resistance around 1.2770 - a bit far below 1.2900 which provided a very stable resistance last week. Short-term studies are in a bearish configuration and a break above 1.2900 is needed to switch bias to the ...

Sell @: 1.2695 TP Sell @: 1.267, 1.2645 SL Sell @: 1.2745

Buy @: 1.5573 TP Buy @: 1.5583, 1.5599, 1.5616 SL Buy @: 1.5523

The greenback is still able to keep its gains versus the single currency after breaking 1.276 last Friday amid the risk aversion which came back containing the market sentiment again putting pressure on the equities markets gained pushing Dow to close last week losing another 89 after short lived rebounding but last Thursday loses by 144 points which triggered by disappointing falling of Philadelphia Fed business survey of August to -7.7. waiting for a quiet rising to 7 after a massive falling f...

U.S. Dollar Trading (USD) was strong on Friday as stocks markets around the world remained heavy and the Euro lead majors lower. The outlook is a little mixed going forward however as the US itself may further expand easing measures to support the economy and potentially weigh on the Dollar. In US stocks, DJIA -57 points closing at 10213, S&P -3 points closing at 1071 and NASDAQ +1 points closing at 2179. Looking ahead, FOMC Member Hoenig Speaks.