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IMM currencies

move both ways

CHICAGO: IMM currency futures closed mixed on Monday, with traders split about the outlook.

Many traders had turned bearish on currencies after last week's tumble. Overnight, September marks matched the lowest level since May 22. September Swiss francs hit the lowest level since May 18 and yen tumbled to the lowest since March 2. September Canadian dollars also fell overnight to the lowest since August 1.

However, some traders remained skeptical. They said September marks would have to first break trendline support at $0.6912, or about 1.45 marks in cash, before being convinced.

Traders said volume would also need to increase substantially to confirm that a trend one way or the other was definitely being established.

September marks briefly pierced resistance at $0.6996 on local activity. But when buy-stops failed to emerge above that, traders said September marks eased back and failed to close above $0.6996.

September yen and Swiss francs ended slightly firmer, retracing some of last week's sharp losses.

September Canadian dollars fell as the unit tried to establish a chart bottom from which it can rally, traders said.

Based on Elliot Wave theory, traders said September Canadian dollars would need to fall to about $0.7300 before rallying again toward $0.7450 and $0.7500.

In addition, September Canadian dollars were expected to drop to finish filling a gap from about $0.7329 to $0.7316 on daily, regular hour trading charts. September slid as low as $0.7326 today.

Early in the day, a large European firm sold 500 September Canadian dollars at $0.7341, traders said. In the afternoon, a large U.S investment bank sold 200 September contracts at $0.7340, they said.

Prices showed little reaction to U.S. June business inventories and the Atlanta Federal Reserve survey. Inventories rose 0.2 percent after a 0.4-percent gain in May.

The Atlanta Fed said the price picture was mixed, but that there was "less pressure" than earlier in 1995.

On Tuesday, traders will see U.S. July capacity utilization and industrial production.A Reuter survey forecasts capacity utilization easing to 83.1 from 83.5. Industrial production was expected to fall 0.2 percent from the previous month's up 0.1 percent.

Implied options volatilities closed off session highs.

At-the-money implied September mark volatility closed near 12.7 percent, Swiss francs at 14.0 percent, yen at 13.3 percent, pounds at 8.25 percent, Canadian dollars at 6.1 percent and French francs at 10.8 percent. Early, a large U.S. firm bought 1,000 September mark $0.6800 puts at 13.8 and 14.0 percent with a 21 delta, traders said.

September marks ended up $0.0016 at $0.6979, September yen up $0.000022 at $0.010739, September Swiss francs up $0.0006 at $0.8401, September pounds down $0.0012 at $1.5694, September Canadian dollars down $0.0012 at $0.7339 and September Australian dollars down $0.0014 at $0.7408.-Reuter