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Forex Daily News: August 19, 2010 - Dollar Moving Mixed

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar fluctuated against most major currencies as risk aversion remained at a high level after a negative assessment of the U.S. economy by a senior Federal Reserve official. The NASDAQ and Dow Jones strengthened by 0.28% and 0.09%, respectively. Crude oil weakened by 0.5% closing at $75.40 a barrel, and Gold (XAU) strengthened by 0.3%, to close at $1231.40 an ounce. Today, Unemployment Claims are expected to weaken from 484K to 478K and the Philly Fed Manufacturing Index is expected to rise from 5.1 to 7.1.

EURO (EUR) – The Euro weakened against the Dollar as European stocks opened weaker, declining for the first time this week and boosting demand for safer assets like the Dollar. The pair has been trading downwards since last week but has made a correction in the last three days. The next resistance on the one hour chart is located at 1.2950 levels, and if the rate trades above this level, the pair will continue with its uptrend. Overall, EUR/USD traded with a low of 1.2823 and with a high of 1.2922. Today, the German PPI is expected to weaken from 0.6% to 0.2%.

EUR/USD – Last: 1.2808

Resistance

1.2932

1.3077

1.3185

Support

1.2734

British Pound (GBP) – The Pound rebounded from a three-week low against the Dollar and rose versus the Euro after minutes of the Bank of England’s last meeting showed policy makers considered arguments for withdrawing emergency stimulus this month. The GBP/USD has been trading very stable in the last four days, the next support on the daily chart is 1.5500, and if the price breaks this level, a short position is preferred. Overall, GBP/USD traded with a low of 1.5498 and with a high of 1.5688. Today, Retail Sales are expected at 0.4% vs. 0.7% prior and CBI Industrial Order Expectations is expected at -14 vs. -16 prior.

GBP/USD - Last: 1.5564

Resistance

1.5700

1.5825

Support

1.5510

Japanese Yen (JPY) –The Yen approached its strongest level against the Euro in more than six weeks and fluctuated versus the Dollar. This occurred as a concern that the global economic recovery is losing steam, and as a result, it boosted demand for the currency as a refuge. As long the USD/JPY is trading below an 86.50 level, a short position is preferred, and the momentum is clearly bearish. The next support is located at 84.60 and the 10 moving average supports a downward trend as well. Overall, USD/JPY traded with a low of 85.19 and with a high of 85.61. No economic data is expected today.

USD/JPY-Last: 85.61

Resistance

86.00

86.20

86.40

Support

85.10

84.70

Canadian dollar (CAD) – The Canadian Dollar rose for a second day versus the Dollar in Forex Trading. This occurred as speculation that a purchase of Potash Corp. of Saskatchewan Inc. will eventually proceed, and thus, raised the prospect of further demand for commodity producers.  As long as the USD/CAD is below 1.0300 levels, a short position is preferred and the momentum is clearly bearish. The next support on the one hour chart is located at 1.0260 and the next resistance is located at 1.0350 levels. Overall, USD/CAD traded with a low of 1.0270 and with a high of 1.0341. Today, the Leading Index is expected at 0.7% vs. 1.0% prior, and Wholesale Sales are expected to rise from -0.1% to 0.4%.

USD/CAD - Last: 1.0289

Resistance

1.0345

1.0465

1.0500

Support

1.0265