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UFXBank Forex Outlook: Yen Strengthens on GDP Data

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar traded mixed against the major currencies as Treasury yields surged on speculation an agreement to extend tax cuts will boost the economy, increasing demand for U.S. assets. The NASDAQ increased by 0.41% and the Dow Jones strengthened by 0.12%. Crude oil weakened by 0.5% and closed at $88.28 a barrel. Gold (XAU) weakened by 1.8% and closed at $1383.20 an ounce. Today, initial jobless claims are expected at 430.00K vs. 436.00K previously.

Euro (EUR) – The Euro USD opened and closed the day of Forex trading at the same rate, 1.3248. The main momentum of the EUR/USD during the two months has been bearish, and as long as the pair is trading below 1.3470 levels, a short position is still preferred according to the daily chart. Overall, EUR/USD traded with a low of 1.3243 and with a high of 1.3322. Today, we are expecting the ECB monthly report and the German CPI to remain unchanged at 0.10%.

EUR/USD – Last: 1.3309

Resistance

1.3443

1.3470

Support

1.3247

1.3179

1.3056

British Pound (GBP) – The Pound rose against the Dollar after the CBI Industrial Order Expectations came out at -3.00, better than the expected -12.00, a sign the recovery is maintaining momentum into the final quarter of the year. The next resistance of GBP/USD on the daily chart is located at 1.5900, and if the rate breaks above this rate, a long position is preferred. If the rate breaks below the 1.5700 level, the pair could decline to 1.5600 levels. Overall, GBP/USD traded with a low of 1.5668 and with a high of 1.5836. Today, the trade balance is expected at -8.10 B vs. -8.20B prior and the interest rate decision is expected unchanged at 0.50%.

GBP/USD - Last: 1.5816R

Resistance

1.5835

1.5900

Support

1.5664

1.5569

1.5509

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 caused investors to be pessimistic on the Yen. But when the market opened in Tokyo last night, the yen rose against the U.S Dollar almost 50 pips after the GDP came out at 1.10%, better than the expected 0.90%.  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 83.48 and with a high of 84.30. No economic data is expected today.

USD/JPY-Last: 83.72

Resistance

84.11

84.40

Support

83.41

83.00

82.33

Canadian dollar (CAD) – The Canadian Dollar gained against the greenback and most of the major currencies. The bank of Canada left the interest rate unchanged at 1 percent. The Housing Starts came out at 187.00K better than the expected 172.00K.The resistance level of the USD/CAD on the 1 hour chart is located at 1.0150, and if the price breaks above this level, the momentum will become positive for the US Dollar. Overall, USD/CAD traded with a low of 1.0063 and with a high of 1.0140. Today, no major data is expected.

USD/CAD - Last: 1.0103

Resistance

1.0150

1.0186

1.0275

Support

1.0075

1.0030

1.0000