.

UFXBank Forex Outlook: Dollar Rises on Proposed Tax Cuts

Written by UFXBank Research Team
Rate this item
(0 votes)

USD Dollar (USD) – The Dollar rose against most major currencies in Forex trading as Treasury yields surged on speculation that there will be an agreement to extend tax cuts to boost the economy, increasing demand for U.S. assets. The NASDAQ increased by 0.14% and the Dow Jones weakened by 0.03%. Crude oil weakened by 0.8% and closed at $88.69 a barrel. Gold (XAU) weakened by 0.5% and closed at $1409 an ounce. No economic data is expected today.

Euro (EUR) – The Euro weakened against the Dollar on speculation that the region’s financial crisis won’t be solved by Ireland’s parliament passing austerity measures required for an 85 billion euro aid package. The main momentum of the EUR/USD during these two months is bearish, as long as it’s trading below the 1.3500 level, a short position is preferred. Overall, EUR/USD traded with a low of 1.3253 and with a high of 1.3400. Today, German Industrial Production is expected to become positive, from -0.80% to 1.0%.

EUR/USD – Last: 1.3225

Resistance

1.3335

1.3420

Support

1.3200

1.3085

1.2970

British Pound (GBP) – The Pound rose against the Dollar after U.K. manufacturing expanded twice as much as economists had forecast in October (0.6% vs. 0.4% forecast vs. 0.2% prior), a sign that the recovery is maintaining momentum into the final quarter of the year. The next resistance for the GBP/USD on the four hour chart is located at 1.5825, and if the rate breaks above this rate, a long position is preferred. If the rate breaks below the 1.5700 levels, the pair could decline to 1.5600 levels. Overall, GBP/USD traded with a low of 1.5704 and with a high of 1.5822. Today, CBI Industrial Order Expectations is expected at -12 vs. -15 prior.

GBP/USD - Last: 1.5729

Resistance

1.5785

1.5820

Support

1.5700

1.5655

1.5580

Japanese Yen (JPY) –The Yen weakened against the Dollar after Japanese Finance Minister Yoshihiko Noda said that the yen’s recent gains were “one sided” and added that he would be “closely watching” developments in the currency market, which causes investors to be pessimistic on the Yen. As long as the USD/JPY is trading above 83.00 levels, a long position is preferred and the next resistance level is located at 84.40. Overall, USD/JPY traded with a low of 82.34 and with a high of 83.66. No economic data is expected today.

USD/JPY-Last: 83.84

Resistance

84.00

84.40

Support

83.45

83.00

82.50

Canadian dollar (CAD) – The Canadian Dollar slid from near its strongest level in more than three weeks versus the Dollar after commodities including crude oil, the nation’s biggest export, reversed gains at the end of the US session. Also, the Canadian fell as the Bank of Canada held interest rates steady at 1 percent for a second straight meeting. The resistance level of the USD/CAD on the four hour chart is located at 1.0150, and if the price breaks above this level, the momentum will become a positive for the US Dollar. Overall, USD/CAD traded with a low of 1.0012 and with a high of 1.0126. Today, Housing Starts are expected to increase from 168K to 172K.

USD/CAD - Last: 1.0122

Resistance

1.0150

1.0215

1.0275

Support

1.0080

1.0030

1.0000