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US Dollar hits 4-Month Low

10-Yr: +08/32..1.655%.. USD-JPY: 78.25.. EUR-USD: 1.2790

The US Dollar Index pushed below the 81.00 level earlier this morning before hovering near 80.25 for most of the session.

The selling has dropped the “Greenback” to its worst level in 4 months as traders ready for next Thursday’s FOMC rate decision.

EUR-USD is +165 pips at 1.2795 as action holds at its best level since the middle of May. Friday’s gains have the single currency nearing a test of its 200-Day Moving Average (1.2840), a level it has not closed above since October of last year.

Eurozone data due out Monday includes Sentix Investor Confidence and French industrial production.

GBP-USD is +80 pips at 1.6015 with Friday’s buying running the pair up to a 4-month high. Resistance lies just above current levels at 1.6050 while near-term support comes into play at 1.5900. Traders are beginning to monitor the 50 and 200-Day Moving Averages which are on the verge of a ‘Golden Cross.’

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USD-CHF is -85 pips at .9455 as today’s weakness has the pair testing its three-month lows. Selling has dropped the pair cleanly below its 100-Day Moving Average with buyers now emerging near the 200-Day Moving Average (.9400).

USD-JPY is -65 pips at 78.20 after earlier selling made for a test of the critical 78.00 support level. Friday’s slide surely has caught the attention of Bank of Japan officials as a push through the level will likely lead to a retest of the record low 85.57. Japan’s current account balance and Final GDP numbers will cross Sunday evening.

AUD-USD is +110 pips at 1.0390 as two straight days of gains have added close to 200 pips. The hard currency has raced back above both its 50 and 200-Day Moving Averages, and is now looking to push through resistance in the 1.0400 area. Australian home loans will be announced late Sunday.

China’s CPI and PPI fixed asset investments, industrial production, and trade balance readings are all scheduled for release this weekend.

USD-CAD is -45 pips at .9780 as action holds near its worst levels in a year. Dollar Bulls will hope to recapture the .9800 support level ahead of the close as a prolonged stay below the level will likely mean broad-based USD weakness is on the horizon.