FXPRO INTRADAY SNAPSHOT

EUR/USD
Remains positive while projected support at 1.4283 holds. Successfully defending 1.4283 would prompt a recovery back to Friday's marginal high at 1.4440, which shields the wave equality target at 1.4458. This 1.4458 target needs to be met in order to validate the recovery off the July 18 higher low at 1.4014. Failure to keep 1.4283 intact would damage the wave structure, and create scope for weakness to the July 21 low at 1.4138.

GBP/USD
Edges towards the 1.6348 upside target, as GBP bulls remain in control. The push into fresh five-week highs opens the wave equality target at 1.6415, which needs to be met in order to validate the short-term rally off the July 12 reaction low at 1.5783. Solid support lies at 1.6175, and only a move below projected support at 1.6151 would concern GBP bulls.

USD/JPY
Resistance at 78.60 and 78.70 is likely to cap upside risk, despite the strong recovery off Monday's Asian session low at 78.12. The main threat remains to the downside, and a break below 78.36 and 78.22 would bring the four-month low at 78.12 back into focus. Regaining ground above 78.70 would provide respite, opening 79.03.

AUD/USD
The bullish AUD tone remains intact while projected support at 1.0794 holds. AUD bulls are on course for meeting important wave equality targets at 1.0907 and 1.0924, which would become achievable on a break above Friday's 1.0877 high. Only a sustained break below 1.0794 would question the positive AUD outlook, exposing 1.0735.

FOREX FOCUS
Financial Armageddon will probably be avoided. But, that won't necessarily be good news for the dollar. On the contrary, protracted negotiations on raising the U.S. debt ceiling could well increase the threat of a ratings downgrade at the same time talk of further U.S. monetary easing is likely to return. In other words, neither fiscal nor monetary forces will be working in the dollar's favor for the foreseeable future. Hopes had been high before last weekend that President Obama was close to hammering out a deal with the Republicans on raising the debt ceiling and allowing the Treasury to continue raising money. But, with the talks now in tatters and the August 2 default deadline drawing closer, it looks increasingly likely the two sides will only come up with a short-term compromise that will keep the Treasury solvent but postpone any tough decision on spending cuts and tax increases until next year. The problem then, of course, is that negotiations could prove even more difficult as they will be taking place just as the two parties start their campaigns for the next presidential election. This will hardly put the U.S. in a good light and with credit agencies likely to keep their threat of a U.S. downgrade alive, Washington could well find it has to offer a weaker dollar and higher Treasury yields to keep foreigners buying its debt. So, the fiscal stresses that have overshadowed the dollar for the last few months could actually intensify if Congress fails to find a longer-term debt solution.

EUROPE
Lingering concerns over the Greek rescue deal and the worryingly glacial pace of U.S. debt-ceiling negotiations knocked investor sentiment during European hours Monday, giving the Swiss franc and Japanese yen a boost. The franc hit an all-time high against the dollar of CHF0.8021, while the dollar dropped to another post-intervention low of Y78.06 against the yen, as rattled traders flocked toward traditional safe havens. Gold climbed to a fresh record high of $1,623.49 per troy ounce, while European equities fell from the open, led down by financial stocks. "It's quite a choppy start to the week and this is set to continue with plenty of big data events on the horizon," said Ian Stannard, senior currency strategist at Morgan Stanley. Although the euro lost ground against the franc, it traded broadly sideways against the dollar as traders weighed up the U.S. fiscal troubles and the Greek bailout package.

ASIA
Asian currency markets took the U.S. debt impasse largely in stride Monday, but the euro slid late in the session when Greece was downgraded to near-default status. Democrats and Republicans missed a deadline they had set for themselves for a deal to raise the debt ceiling -- and avoid default -- in time for Asian markets to open. But while the dollar weakened, traders seemed if anything bored with the exercise: data from EBS indicate activity among major currencies were barely half their average levels of the past 30 sessions. Asian currency markets still expect "that something will get cobbled together," said Adrian McGowan, head of Asia-Pacific trading at Barclays Capital in Singapore. But late in the session, Moody's slashed Greece by three notches to Ca, a cut above default, on expectations that the latest bailout will force "substantial economic losses" on private creditors.

WORLD
Initial euphoria over Europe's solution to Greece's debt crisis wore off Friday in New York, sending the euro lower against major currencies as markets questioned whether the fundamental outlook for troubled euro-zone countries had really changed. On Thursday, European Union leaders reached a comprehensive solution to the Hellenic republic's distressed debt situation, amid fears that Greece's woes could spread to larger European economies such as Spain and Italy. In particular, analysts welcomed plans to expand the scope of the European Financial Stability Facility (EFSF), a funding vehicle that is a linchpin of Europe's efforts to rescue debt-laden countries. But many market observers say that the devil remains in the details, many of which are still hazy at best. While the broadening of the EFSF's powers appears sufficient to handle Greece's immediate needs, analysts harbored doubts about whether it could contend with the country's long-term financing needs--and if it could manage a bailout of Italy and Spain, the euro zone's third and fourth largest economies, respectively. The assets of both countries have recently been a target of jittery investors.