<Dollar/Yen>

Since investors are cautious of intervention at 77's, the dollar is hard to fall against the yen. However, selling of the greenback and cross-yen pairs is strengthening at the same time. As a result, Dollar/Yen may continue to fluctuate. Especially because of holiday breaks in August, investors reduce and the market will become stagnant. Japanese investors have to sell the dollar for taking profit of U.S bond's interest and for actual demand, which will pressure the dollar, while possibility of intervention and buying of dollar for import give support to the greenback. Together with the possibility of QE3, it is better to sell the dollar.

Expected Range: 77.500-79.200   Sell the dollar on rallies.

Although possibility of actual intervention will increase after breaking below 77.50, it is still hard to reach 80's. Since there are not many selling positions in the market, large scale of short cover.

<Euro/Dollar>

A great amount of the euro selling position was closed in the last three days of the last week. ECB's Nowotny made a comment that ESM be granted a banking license. "The ECB is ready to do whatever it takes to preserve the euro" said by Draghi, giving certain support to the euro. Germany and France said in a joint statement after a telephone talk that they vow to protect Eurozone. As a result, the euro rose up to 1.2390 against the greenback. Nevertheless, as there is no actual measure after all, the euro is likely to fall if nothing is done in real afterward.

The euro may also be sold if the possibility of Greece to exit Eurozone increase. The market is ready to sell the euro as there are still lot of net short Euro.

Expected Range: 1.21500-1.25500   Sell the euro on rallies

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