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UFXBank Forex Outlook: Euro Ends Down Week with a Loss

Written by UFXBank Research Team
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USD Dollar (USD) – The U.S. currency rose against most of its major counterparts after benchmark Treasury yields reached a six-month high last week on speculation that an extension of tax cuts will boost U.S. growth. The NASDAQ increased by 0.80% and the Dow Jones rose   by 0.35%. Crude oil fell by 0.7% and closed at $87.79 a barrel. Gold (XAU) fell by 0.6% and closed at $1384.90 an ounce. Today, no economic data is expected.

Euro (EUR) – The euro fell against the Dollar on Friday, closing a week of daily drops in Forex trading. European Union leaders will discuss, this week, the creation of a permanent mechanism to shore up over-indebted countries as the European Central Bank tries to hammer out plans to aid the region’s weakest lenders. As long as the pair is trading below 1.3250 levels, a short position is still preferred according to the 1 Hr chart. Overall, EUR/USD traded with a low of 1.3178 and with a high of 1.3283. Today, the ECB president will speak.

EUR/USD – Last: 1.3192

Resistance

1.3207

1.3262

1.3306

Support

1.3172

1.3077

British Pound (GBP) – The Pound rose against the Dollar after the PPI Output came out at 0.30% as expected. The next resistance of GBP/USD according to 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 levels, the pair could decline to 1.5600 levels. Overall, GBP/USD traded with a low of 1.5747 and with a high of 1.5862. Today, PPI Input is expected at 0.50% vs. 2.10% previously.

GBP/USD - Last: 1.5782

Resistance

1.5837

 

 

Support

1.5763

1.5716

1.5658

Japanese Yen (JPY) –The Yen fell against the Dollar last Friday. The Bank of Japan’s forecast for an end to deflation in 2011, and 35 trillion yen ($417.8 billion) of spending, have done little to change the thinking in the bond market, where investors see eight more years of falling prices. 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 83.45 and with a high of 84.01. No economic data is expected today.

USD/JPY-Last: 84.11

Resistance

84.27

Support

83.89

83.47

82.53

Canadian Dollar (CAD) The Looney rose for a third day, trimming gains as stocks pared an advance. The Bank of Canada said in a report, that the risks to the nation’s financial system have increased in the past six months because of Europe’s debt crisis, global trade imbalances, and rising debt of local households. The trade balance came out at -1.70B, better than the expected -2.00B. 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 a positive for the US Dollar. Overall, USD/CAD traded with a low of 1.0083 and with a high of 1.0116. Today, the BoC Gov Carney speaks.

USD/CAD - Last: 1.0094

Resistance

1.0112

1.0134

Support

1.0070

1.0029