Brown Brothers Harriman - "Euro: After recovering from $1.2755 on July 9 to $1.3200 on July 11, the single currency has been consolidating. In that consolidation, it has been carving out what appears to be a flag, which is understood as a continuation pattern. However, we are skeptical of the pattern's validity as it is getting too close to the apex. Nevertheless, the relative strength index and the MACDs are constructive and the 5-day average crossed above the 20-day average early in the week, suggesting trend followers may be getting nervous. In addition, the euro finished the week well above the 100-day average (~$1.3035) and the 200-day average (~$1.3080). We see scope toward $1.3250 in the week ahead, with support in the $1.3050-80 area.
Yen: Before the weekend, the dollar traded at a 7-day high against the yen, but it was stopped by a trend line, drawn off the year's high near JPY103.74 and recent high near JPY101.55, that came in near JPY100.90. The governing coalition is widely expected to secure a solid majority in the upper house elections, whose results will most likely be known before the markets open on Monday. The technical tone is constructive the dollar. A convincing break of the JPY99.50 area would undermine the outlook for the greenback.
Sterling: While the euro failed to rise above the previous week's high, sterling managed to do so and close above it on a weekly basis. The 5-day average crossed above the 20-day average just ahead of the weekend. The gains approached the 50% retracement objective of sterling's losses since the mid-June peak near $1.5750. Other technical indicators are also supportive. The upside potential extends toward $1.5400. Support is pegged near $1.5170."