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UFXBank Forex Outlook: Euro Bleeding Stops...for now

Written by UFXBank Research Team
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USD Dollar (USD) – The dollar trimmed a small part of yesterday's gains versus most of the major currencies on a quiet day of Forex trading. The Building Permits came out 0.53M worse than expected 0.57M. Housing Starts came out 0.56M better than expected 0.55M. The Initial Jobless Claims came out 420k better than expected 425k. The Philadelphia Fed Manufacturing Index surprised with improving from 22.5 in November to 24.3 in December, much better than expected forecast of 14.1. The Stock Markets in U.S. closed positive as the Dow Jones gained 0.36% and the NASDAQ raise by 0.77%. The Crude Oil fell by -1% and closed around the 88$ a barrel. Gold (XAU) declined for a second day in a row, by -1.1% and closed at 1371$ an ounce. No major economic data is expected today.

Euro (EUR) – The European currency decline was halted as possible steps to solve euro zone debt crisis were discussed by European Union leaders. The French PMI came out 56.3 worse than expected 58. The German Manufacturing PMI came out 60.90 better than expected 58.20. The Manufacturing PMI came out 56.8 better than expected 55.3. The CPI came out unchanged at 1.9% as expected. The critical support level is lying at 1.3170 areas, breaking this level will push the euro back to 1.3 zones otherwise rebound to 1.34 zone is possible. Overall, EUR/USD traded with a low of 1.3181 and with a high of 1.3265. Today, the German Ifo Business Climate Index is expected at 109.2 vs. 109.3 previously.

EUR/USD – Last:  1.3281








British Pound (GBP) – The Pound rose against the dollar after two days of decline as the dollar lost momentum across the board. The Retails Sales came out 0.3% worse than expected 0.5%. Holding above the 1.5580 support area turns the momentum to positive for the pair. Overall, GBP/USD traded with a low of 1.5539 and with a high of 1.5635. No economic data is expected today.

GBP/USD - Last: 1.5628








Japanese Yen (JPY) – The yen gained against the dollar as Treasuries yields in U.S. fell and lead to decreased demand for U.S. assets. Only breaching the critical resistance level of 84.40 will push the pair higher otherwise it will fall back to 83 areas. Overall, USD/JPY traded with a low of 83.84 and with a high of 84.43. No economic data is expected today.

USD/JPY-Last: 83.89







Canadian dollar (CAD) - The Canadian dollar weakened against most of its major counterparts as crude oil declined but the USD/CAD pair is still capped in a tight range for the last 10 trading days. Only breaking the critical support level of 0.9980 will push the pair lower otherwise rebound above 1.01 is possible. Overall, USD/CAD traded with a low of 1.0030 and with a high of 1.0073. No economic data is expected today.

USD/CAD - Last: 1.0048








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