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UFXBank Forex Outlook: CAD Strengthens Against USD 4 Days Running

Written by UFXBank Research Team
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USD Dollar (USD) – The U.S. currency fell against most of the major currencies in Forex trading 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 fell by 0.48% and the Dow Jones rose by 0.16%. Crude oil rose by 0.9% and closed at $88.61 a barrel. Gold (XAU) rose by 1% and closed at $1398 an ounce. Today, the Core Retail Sales (MoM) is expected at 0.60% vs. 0.40% previously and Retail Sales are expected at 0.50% vs. 1.20%. The Interest Rate Decision  is expected unchanged at 0.25% and the FOMC statement is expected.

Euro (EUR) – The euro strengthened against the Dollar after one week of falling. European Union leaders, this week, will discuss 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 trades below the 1.3500 levels, a short position is still preferred according the daily chart. Overall, EUR/USD traded with a low of 1.3182 and with a high of 1.3433. Today, German ZEW Economic Sentiment is expected at 3.90 vs. 1.80 previously.

EUR/USD – Last: 1.3394

Resistance

1.3434

1.3500

Support

1.3317

1.3243

1.3187

British Pound (GBP) – The Pound rose against the Dollar after the PPI Input came out at 0.90%, better than the expected 0.50%. The next resistance of the GBP/USD, according to the daily chart, is located at 1.5900. 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 1.5719 and with a high of 1.5897. Today, the CPI is expected unchanged at 3.20%.

GBP/USD - Last: 1.5864

Resistance

1.5900

1.6000

 

Support

1.5790

1.5722

1.5690

Japanese Yen (JPY) –The Yen rose against the Dollar on Monday. 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 83.10 and with a high of 84.35. Today, industrial production is expected unchanged at -1.80%.

USD/JPY-Last: 83.46

Resistance

83.81

84.27

Support

82.66

Canadian dollar (CAD) the Looney rose for a 4th day as gains in commodities and stocks made currencies related to economic growth more attractive. 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 1.0028 and with a high of 1.0107. Today, Labor Productivity is expected at 0.30% vs. -0.80%.

USD/CAD - Last: 1.0074

Resistance

1.0095

1.0132

Support

1.0045

1.0019

 

 

 

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