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UFXBank Forex Outlook: CAD Unstable Despite Crude Rally

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar dropped against most major currencies in Forex trading as U.S. payrolls added less jobs than were forecast last month (35K vs. 143K forecast). This kept unemployment near a 26 year high, coming out at 9.8% vs. 9.6% forecast, and is spurring speculation that the recovery is faltering. The NASDAQ and Dow Jones strengthened by 0.47% and 0.17% respectively. Crude oil rose by 1.4% and closed at $89.20 a barrel, the highest price in two years. Gold (XAU) increased by 1.0%, closing at $1406.20 an ounce. No economic data is expected today.

Euro (EUR) – The Euro rose against the dollar for the first week in a month as the European Central Bank intervened to curb the spread of the sovereign debt crisis, which threatened to engulf the euro zone. Also the release of the Nonfarm Payrolls in US supported a bullish momentum on the EUR/USD. The EUR/USD momentum is bullish as long it’s trading above 1.3250. The next support is located at 1.3300, and the RSI indicator supports a bullish momentum for the Euro. Overall, EUR/USD traded with a low of 1.3183 and with a high of 1.3438. No major economic data is expected today.

EUR/USD – Last: 1.3343

Resistance

1.3438

Support

1.3300

1.3200

1.3050

British Pound (GBP) – The Pound gained versus the Dollar after the European Central Bank said it would delay stimulus withdrawal to calm market turmoil as investor appetite grew for higher yielding assets. Moreover, the payrolls data supported a stronger pound as well. The next resistance of GBP/USD on the four hour chart is located at 1.5800. If the price breaks above this rate, a long position is preferred, and the 20 moving average supports an upwards trend. Overall, GBP/USD traded with a low of 1.5581 and with a high of 1.5788. No economic data is expected today.

GBP/USD - Last: 1.5741

Resistance

1.5785

Support

1.5665

1.5550

1.5500

Japanese Yen (JPY) –The Yen gained against the Dollar as a government report showed employers added fewer jobs in November than economists forecast, which drifted investors towards the yen instead of the Dollar. As long as the USD/JPY is trading below the 83.20 level, a short position is preferred. Overall, USD/JPY traded with a low of 82.52 and with a high of 83.84. No economic data is expected today.

USD/JPY-Last: 86.35

Resistance

84.40

86.00

88.10

Support

82.50

80.30

Canadian dollar (CAD) – The Canadian Dollar fluctuated on Friday despite crude oil, the nation’s biggest export, rallying to a two year high. The addition of mixed data released from Canada such as the Employment Change, which came at 15.2K vs. 20.2K forecast, and the Unemployment Rate that came at 7.6% vs. 7.9% forecast, caused the Canadian currency to be unstable during the session. The support level of the USD/CAD on the daily chart is located at 0.9980, and if the price breaks below this level, the momentum will continue to be negative for the US Dollar. Overall, USD/CAD traded with a low of 1.0003 and with a high of 1.0080. Today, Building Permits are expected to weaken from 15.30% to -2.50%, Ivey PMI is expected at 56.20 vs. 56.70 prior.

USD/CAD - Last: 1.0053

Resistance

1.0080

1.0150

1.0235

Support

1.0020

1.0000

 

 

 

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