The euro kept to a tight range in Asian trade, with some scepticism about the credibility of the euro zone's stress tests on its banking sector keeping investors sidelined. Only 7 of 91 banks, 5 small Spanish banks, Germany's state-rescued Hypo Real Estate & Greece's ATE bank failed the tests, for an overall capital shortfall of 3.5 bn euros. Market expectations for the shortfall had ranged from 30- 100 bn euros, although many European banks have already raised capital during the financial crisis. The Euro broke above 1.3000 twice but has significantly corrected to 1.2750 levels. The bias is rangebound though a clear break of 1.2700 this time should favour downside scenario. (EURUSD - 1.2910). Neutral

There is a broad consensus that the second half of this year will be difficult for the UK economy as it struggles in the! face of budget reform. The news that Q2 GDP was far stronger ! than exp ected (+1.1% q/q) doesn't change this impression but it significantly reduces the chance that the UK economy will fall back into double dip recession on the back of austerity measures. The GBPUSD was bullish yesterday after touched high of 1.5449, and closed at 1.5420 . Break of 1.50 would be bearish for the trend. Exporters may book at current levels. GBPUSD 1.5450

USDJPY is currently trading at 91.50 levels. We have seen an up move due to increased risk appetite but still moving in a bearish bias. Target 90 again. Overall yen should remain range bound till a decisive break.  (USDJPY 87.43) Neutral

The Asia and Europe have yet to price the stress test results, so further gains are possible, although strength in AUDUSD is waning. AUDUSD currently trading at 0.8970 levels. The bias remains range bound but overbought. Any type of news signifying downward growth concerns for the emerging economies like China would seriously weigh down t! he currency. Immediate support at 0.8650 area. (AUDUSD - 0.8970). Neutral

Gold is currently trading at 1193 levels and does not seem to be very bullish now. It is holding below its important moving averages of 55 day in daily charts. Most likely target could be 1110 dollars in case we see a closing below 1170 dollar . Please note that risk will remain heavily on the downside as 1266.5 resistance holds, and we'd expect another decline sooner or later. Sell on upticks is recommended only on break of 1170 dollars. (Gold- $1193) Neutral

The Dollar index's currently trading at 82.48 levels. The weekly close below 38.2% retracement of 74.19 to 88.70 at 83.15 will solidify this bearish case and bring deeper decline going forward towards 80.04 support, which is close to 80 psychological level as well as 61.8% retracement at 79.73. Incase we don't see 84.56 resistance breaking we have to look for further weakness in the index. (Dollar Index– 82.48) Neutra! l