Forex Daily News: August 18, 2010 - Euro Rises, GBP Down, on USD

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar was mixed versus other major currencies after positive U.S. economic data, which support the idea of a recovering economy, succeeded to support the stock market and the commodities indices. The NASDAQ and Dow Jones rose by 1.26% and 1.01%, respectively. Crude oil increased by 0.7% to close at $75.70 a barrel, and Gold (XAU) strengthened by 0.2%, closing at $1228.30 an ounce. No economic data is expected today.

EURO (EUR) – The Euro rose versus the Dollar after good data was released from the European zone, like the ZEW Economic Sentiment, which came better than the forecast at 15.8 vs. 10.6. This led investors to buy into the Euro. The pair has been trading downwards since last week, but has made a correction during the last two days. The next resistance on the daily chart is located at 1.3000 levels, and if the rate trades above this level, the pair will continue with its uptrend. Overall, EUR/USD traded with a low of 1.2804 and with a high of 1.2916. No economic data is expected today. EUR/USD – Last: 1.2849

British Pound (GBP) – The Pound fell against the Dollar after the governor for the Bank of England wrote an open letter to the British chancellor explaining why inflation is still above target. The GBP/USD has been trading very stable in the last three days. The next support on the daily chart is at 1.5500, and if the price breaks this level, a short position is preferred. Overall, GBP/USD traded with a low of 1.5551 and with a high of 1.5695. Today, the MPC Meeting Minutes will be released. GBP/USD - Last: 1.5553

Japanese Yen (JPY) –The Yen fell against most majors in Forex Trading, as advances by stocks and commodities dampened demand for financial safe havens. The yen also weakened as a result of speculation that Japan’s policy makers will move to slow the currency’s appreciation after it gained 9 percent against the Dollar this year. As long the USD\JPY is trading below 86.50, a short position is preferred, and the momentum is clearly bearish. The next support is located at 84.60 and we find that the 10 moving average supports a downward trend as well. Overall, USD/JPY traded with a low of 85.18 and with a high of 85.68. No economic data expected today. USD/JPY-Last: 85.38

Canadian dollar (CAD) – The Canadian Dollar strengthened against most majors as global stocks rallied and Potash Corp., of Saskatchewan Inc., received a $39 billion purchase offer that boosted demand for growth assets.  As long the USD/CAD is below 1.0400 levels, a short position is preferred and the momentum is bearish. The next support on the one hour chart is located at 1.0300, and the next resistance is located at 1.0450 levels. Overall, USD/CAD traded with a low of 1.0308 and with a high of 1.040436. No economic data is expected today. USD/CAD - Last: 1.0331