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UFXBank Forex Outlook: Euro Falls on Irish Debt Concerns

Written by UFXBank Research Team
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USD Dollar (USD) – The dollar gained across the board in Forex trading after investors sought safety on the USD as risk aversion is back to the markets. The PPI came out 0.4% worse than the expected 0.8%. The TIC Net Long-Term Transactions came out at 81B worse than the expected 100.3B. Industrial Production came out at 0%, worse than the expected 0.3%. The Stock Markets in U.S. closed negative as the Dow Jones weakened by -1.59% and the NASDAQ fell by -1.75%. Crude Oil plummeted by -3% closing at $82.40 a barrel. Gold (XAU) dropped -2.2% and closed at $1339 an ounce. Today, Building Permits are expected at 0.57M vs. 0.55M previously. The Housing Starts are expected at 0.6M vs. 0.61M previously. The CPI is expected at 0.3% vs. 0.1% previously.

Euro (EUR) – The Euro showed another day of weakness against the dollar and touched a 7 week low on concerns over Ireland’s debt and Greece’s economic stability. The German ZEW Economic Sentiment came out 1.8 better than the expected -6. The CPI came out unchanged at 1.9%, as expected. Holding below the 1.3560 resistance area keeps the momentum negative for the pair. Overall, EUR/USD traded with a low of 1.3447 and with a high of 1.3654. No economic data is expected today.

EUR/USD – Last:   1.3502

Resistance

1.3560

1.3640

1.3680

Support

1.3450


British Pound (GBP) – The Pound fell against the dollar and was affected by concerns that Europe’s debt crisis will hurt demand for riskier assets. The CPI came out at 3.2%, better than the expected 3.1%. The Sterling has broken the critical support level of 1.5950 and it might cause the pair to begin a strong bearish trend as long as it is holding below that level. Overall, GBP/USD traded with a low of 1.5838 and with a high of 1.6086. Today, the Claimant Count Change is expected at 6k vs. 5.3k previously. MPC Meeting Minutes are also expected.

GBP/USD - Last:  1.5878

Resistance

1.5900

1.5980

1.6030

Support

1.5840



Japanese Yen (JPY) – The Dollar completed another positive day versus the Yen and touched 1 month high levels. Holding above the 82.70 support zone keeps the momentum positive for the pair. Overall, USD/JPY traded with a low of 82.84 and with a high of 83.58. No economic data is expected today.

USD/JPY-Last: 83.40

Resistance

83.50

Support

83.25

82.70

82.00

Canadian dollar (CAD) – The U.S. dollar jumped against Canada's dollar to a 2 week high as stock markets and commodities tumbled on slowing recovery concerns. This decreased demand for currencies linked to commodities and economic growth. Manufacturing Sales came out -0.6% better than the expected -0.7%. Holding above the 1.0180 support zone keeps the momentum positive for the pair. Overall, USD/CAD traded with a low of 1.0068 and with a high of 1.0252. No economic data is expected today.

USD/CAD - Last: 1.0218

Resistance

1.0250


Support

1.0200

1.0140

1.0030