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Forex Daily News: July 22, 2010 - Dollar Bounces Back on news from Fed

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar strengthened versus most majors in Forex Trading after Federal Reserve Chairman Ben S. Bernanke said the economic outlook in the U.S is unusually uncertain, which led the investors to sell risky assets and to buy the Dollar as a refuge. NASDAQ and Dow Jones weakened by 1.58% and 1.07% respectively. Crude oil decreased by 1.3% closing at 76.5$ a barrel. Gold (XAU) closed almost unchanged at 1191$ an ounce. Today, Unemployment Claims are expected to rise from 429K to 449K, Fed Chairman Bernanke Testifies, Existing Home Sales are expected at 5.18M vs. 5.66M prior.

EURO (EUR) – The Euro extended its decline versus the Dollar after Portugal’s borrowing costs rose at an auction of 1.2 billion Euros of 12 month bills after yields surged in April and May amid Europe’s debt crisis. The main resistance of the EUR/USD on the daily chart  is 1.3030, as long the price is below this level a short position is preferred, the main support is located at 1.2700. Overall, EUR/USD traded with a low of 1.2732 and with a high of 1.2913. Today, German Flash Services PMI is expected at 58.0 vs. 58.4, Industrial New Orders are expected to weak from 0.6% to -0.1%.

EUR/USD – Last: 1.2773

Resistance

1.2828

1.2915

1.3010

Support

1.2730

British Pound (GBP) – The Pound  weakened against the Dollar after the minutes of the Bank of England’s last meeting showed policy makers voted unanimously to keep the bank’s asset-purchase program unchanged at 200 billion pounds ($306 billion). The main support of the GBP/USD on the one hour chart is 1.5100, if the price trades below this level the momentum will be bearish .Overall, GBP/USD traded with a low of 1.5119 and with a high of 1.5336. Today, Retail Sales are expected at 0.5% vs. 0.6% prior.

GBP/USD - Last: 1.5177

Resistance

1.5310

1.5400

1.5475

Support

1.5155

1.5120

Japanese Yen (JPY) –The Yen strengthened versus the Dollar and the Euro as concern over the pace of the U.S. recovery and the financial health of European banks boosted demand for Japan’s currency as a refuge. The main resistance of the USD/JPY is 89.20 level as long it's trading below this level a short position is preferred, if it breaks this level the trend will be upwards. Overall, USD/JPY traded with a low of 86.86 and with a high of 87.43.

USD/JPY-Last: 86.46

Resistance

87.60

88.30

89.0

Support

86.25

Canadian dollar (CAD) – The Canadian Dollar declined for the first time in three days versus the Dollar after Canadian wholesale trade unexpectedly slipped in May, led the investors to sell the Canadian currency. Wholesale Sales came out at -0.1% vs. 0.4% forecast.  As long the USD/CAD below 1.0600 levels a short position is preferred. Overall, USD/CAD traded with a low of 1.0351 and with a high of 1.0502. Today, Retail Sales are expected to rise from -2.0% to 0.5%, BOC Monetary Policy Report, BOC Press Conference.

USD/CAD - Last: 1.0493

Resistance

1.0500

1.0580

Support

1.0440

1.0350

1.0280