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Forex Daily News: July 14, 2010 - Positive Signs for the Euro

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar weakened versus most majors as U.S economic data indicates a slower growth in the second half of this year. Trade balance data came out negative with   -42.3B vs. -39.5B expected, showing more is spent on imports, lowering gross domestic products eventually. This lowered USD’s appeal as a safe haven for investors.  NASDAQ and Dow Jones rose by 1.99% and 1.44% respectively, crude oil rose by 2.93% to a weekly high, closing at 77.19$ a barrel, Gold (XAU) rose by 1.3% closing at 1212.05$ an ounce. Today, Core Retail Sales are expected at -0.1% vs. -1.1% previous; Retail Sales expected at -0.2% vs. -1.2% previous. Also, FOMC meeting minutes will be published today giving insights on the FOMC’s stance on future interest rate. Crude Oil Inventories are also due to be published.

EURO (EUR) – The Euro gained against most currencies in Forex Trading as Greece successfully auctioned debt to investors, restoring investors’ confidence after Portugal’s credit rating downgrade and German ZEW data which came out weaker than expected at 21.2. The EUR/USD has been trading upwards for the pass month with a clear technical uptrend, forming higher highs and higher lows, after breaking up another resistance at 1.2722. Unless obvious signs of a trend reversal appear, the direction remains upwards. Overall, EUR/USD traded with a low of 1.2521 and with a high of 1.2737, closing at 1.2722 gaining 1.01%. Today, Core CPI is expected at 0.9% vs. 0.85% previous, and CPI expected at 1.4% left unchanged.

EUR/USD – Last: 1.2714

Resistance

1.2739

Support

1.2691

1.2614

1.2551

British Pound (GBP) – The Pound rose versus the Dollar and all majors approaching weekly highs after Core CPI data came out higher than expected at 3.1% vs. 2.7%, indicating a possible rise in inflation and possibly leading to a future change in monetary policy. The GBP/USD is back on its clear technical uptrend, and if it breaks its resistance at 1.5242 the trend is likely to continue .Overall, GBP/USD traded with a low of 1.4962 and with a high of 1.5189. Today, unemployment rates are expected to remain unchanged at 7.9%.

GBP/USD - Last: 1.5205

Resistance

1.5242

Support

1.5143

1.5078

1.4963

Japanese Yen (JPY) –The Yen weakened versus the Dollar and majors after the Japanese stock market began to stabilize, drawing investors away from the currency and to the markets. The pair is retracing June’s drop and is at resistance levels at the moment, where was previously a support on the daily chart and on Fibonacci 30% retracement levels. For now, waiting for a clear pattern for a further decline will provide a selling opportunity with a technical stop loss rate. Overall, USD/JPY traded with a low of 88.01 and with a high of 88.85. Today, Japanese interest rate decision is expected to remain unchanged.

USD/JPY-Last: 88.84

Resistance

89.15

Support

88.37

87.99

87.02

Canadian Dollar (CAD) – The Canadian Dollar gained against the USD, sending the pair back to its week long downtrend, as oil prices continue to rise. Oil is Canada’s major export product, affecting the local currency accordingly. The long term direction in the pair is unclear and it’s mostly ranging for the past months. Looking for a short term reversal upwards is possible above 1.0385. Overall, USD/CAD traded with a low of 1.0274 and with a high of 1.0384.

USD/CAD - Last: 1.0314

Resistance

1.0344

1.0385

1.0462

Support

1.0276