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Forex Trading: July 9, 2010 - Fundamental versus Technical Analysis

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar was mixed against most of the other major currencies in Forex Trading after better than expected U.S. data on initial jobless claims supported a stronger Dollar. But eventually, the stocks markets and oil succeeded to rise nicely, causing the Dollar to be unstable. Unemployment Claims came out at 454K vs. a 461K forecast. The NASDAQ and Dow Jones advanced by 0.74% and 1.20%, respectively. Crude oil rose by 1.9% closing at 75.44$ a barrel, while Gold (XAU) weakened by 0.2% closing at 1196$ an ounce. There is no major news expected today.

EURO (EUR) – The Euro climbed above 1.27 for the first time since May as European Central Bank President Jean-Claude Trichet said the economic recovery is gaining momentum. Moreover, Trichet left the interest rate unchanged at 1.0%. The EUR/USD has been trading upwards since last week and broke its resistance levels on the daily chart at 1.2500, therefore the momentum is bullish, as long the price is above 1.2500 a long position is preferred. Overall, EUR/USD traded with a low of 1.2624 and with a high of 1.2712. Today, ECB President Trichet Speaks.

EUR/USD – Last: 1.2689

Resistance

1.2712

Support

1.2625

1.2550

1.2480

British Pound (GBP) – The Pound weakened from a two-month high against the Dollar as the Bank of England kept its bond-buying stimulus program unchanged and the interest rate unchanged as well - at 0.5%, which disappointed investors buying the pound. The GBP/USD has been trading upwards since June  therefore the momentum is clearly bullish, the main resistance level on the daily graph is located at 1.5260 .Overall, GBP/USD traded with a low of 1.5102 and with a high of 1.5241. Today, PPI Input is expected to become positive from -0.6% to 0.1%, Trade Balance is expected at -7.1B vs. -7.3B prior.

GBP/USD - Last: 1.5153

Resistance

1.5172

1.5230

Support

1.5085

1.4870

Japanese Yen (JPY) –The Yen dropped against most majors as the International Monetary Fund’s boost in its global growth forecast and U.S. and Australian job reports spurred demand for higher-yielding assets. The main resistance of the USD/JPY is 89.0 and as long it's trading below this level, a short position is preferred - the 20 moving average supports a downward trend as well. Overall, USD/JPY traded with a low of 87.80 and with a high of 88.64. No economic data expected today.

USD/JPY-Last: 88.54

Resistance

88.65

Support

88.0

87.35

87.0

Canadian dollar (CAD) – The Canadian Dollar strengthened to its highest level in more than a week against the Dollar on speculation that Canadian employment data could be better than economists’ forecasts. As long the USD/CAD is below 1.0500 levels, a short position is preferred, the momentum in the last few days is clearly bearish. Overall, USD/CAD traded with a low of 10379 and with a high of 1.0481. Today, Employment Change is expected at 17.9K vs. 24.7K prior, and the unemployment Rate is expected to remain at 8.1%. Housing Starts are expected to rise from 189K to 193K.

USD/CAD - Last: 1.0432

Resistance

1.0475

1.0605

1.0680

Support

1.0380