Markets remains generally steady in range as the day goes. Stocks in US opened nearly flat today but some buying is seen after slightly better than expected housing data from US. Yen is a bit softer after the release on risk appetite trades. Dollar remains generally soft, in particular against commodity currencies. The data also helps sent crude oil back above 79 level and lifts Canadian dollar. Meanwhile, gold has another dive and is pressing 1180 level. New home sales rose more than expected to 330k annualized rate in June, comparing to expectation of 320k. Though, prior month's data was revised sharply down from 300k to 267k. Other data released today saw Japan merchandise trade surplus widened to JPY 456b in June, lower than expectation. Both exports and imports fell over the month on a value basis. Australian PPI rose much less than expected by 0.3% qoq, 1.0% yoy in Q2.

Dollar index drops mildly today and is heading towards 82.08 low. We believe that recovery from 82.08 is completed after touching 4 hours 55 EMA and whole decline from 88.70 is resuming. As noted before, such fall is treated as a correction to medium term rise from 74.10 and should then target key support level of 80.04, which is close to 80 psychological level as well as 61.8% retracement at 79.73. Nevertheless, downside should be contained there to conclude the correction and bring rebound.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2811; (P) 1.2888 (R1) 1.2983; More.

Another rise is still mildly in favor in EUR/USD with 1.2731 minor support intact. But after all, we'd look for reversal signal as EUR/USD approaches cluster level of 1.3105/3123 (38.2% retracement of 1.5143 to 1.1875 at 1.3123, 161.8% projection of 1.1875 to 1.2466 from 1.2149 at 1.3105). On the downside, break of 1.2731 will indicate that EUR/USD has topped out and target 1.2149/2466 support zone first.

In the bigger picture, while a medium term bottom is in place at 1.1875, there is no indication of trend reversal yet. Rise from 1.1875 is viewed as a correction, or part of consolidation in the larger decline only. Whole fall from 1.6039 is still expected to continue to 1.1639 support and below. However, considering bullish convergence condition in weekly MACD, decisive break of mentioned 1.3105/3123 cluster level will argue that whole fall from 1.6039 might have finished totally at 1.1875 and will turn focus to 55 weeks EMA (now at 1.3455) for more evidence.