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Forex Daily News: August 23, 2010 - Euro Drops for Second Week

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar continued to rise against other major currencies on Friday, as fears of a slowdown in the global economic recovery were bolstered by worse than expected U.S. jobless claims. The report, which came out on Thursday, showed that claims had risen to their highest level since November 2009 and caused investors to sell off risky assets. The NASDAQ strengthened by 0.04% and the Dow Jones weakened by 0.56%. Crude oil weakened by 1.3% closing at $73.40 a barrel, while Gold (XAU) declined by 0.5% to close at $1228.80 an ounce. No economic data is expected today.

EURO (EUR) – The Euro dropped for a second week against the Dollar, falling to a five-week low, as weaker economic data and calls by a European Central Bank official for more economic aid damped investor appetite for higher-yielding currencies. The pair has been trading downwards since August and trading under the 10 moving average on the daily chart, therefore the momentum is bearish and a short position is preferred. Overall, EUR/USD traded with a low of 1.2663 and with a high of 1.2833.Today, German Flash Manufacturing PMI is expected at 60.9 vs. 61.2 prior, Flash Manufacturing PMI is expected at 56.3 vs. 56.7 prior.

EUR/USD – Last: 1.2712

Resistance

1.2734

1.2833

1.2922

Support

1.2660

British Pound (GBP) – The Pound fell versus the Dollar and yen in Forex Trading, as concern that the global economic recovery is slowing, further boosted demand for the safest assets. The GBP/USD has been trading very stable in the last week, the next support on the daily chart is 1.5480, and if the price breaks this level, a short position is preferred. Overall, GBP/USD traded with a low of 1.5460 and with a high of 1.5595. No economic data expected today.

GBP/USD - Last: 1.5563

Resistance

1.5588

1.5700

Support

1.5500

1.5460

Japanese Yen (JPY) –The Yen rose against most majors as data indicated the global economic recovery may be faltering. As long as the USD\JPY is trading below 86.50 levels, a short position is preferred and the momentum is clearly bearish. The next support on the chart is located at 84.60. Overall, USD/JPY traded with a low of 85.19 and with a high of 85.82. No economic data expected today.

USD/JPY-Last: 85.35

Resistance

85.90

86.40

Support

85.10

84.90

Canadian dollar (CAD) – The Canadian Dollar weakened to the lowest level in a month versus the Dollar. The drop came after a report of Core CPI showed negative data in July, coming in lower than the expected forecast (-0.1% vs. 0.1), and this led investors to sell the Canadian currency. As long the USD/CAD is above 1.0450 levels, a long position is preferred. The next resistance on the one hour chart is located at 1.0520 if the price crosses this level, the trend will continue to be bullish. Overall, USD/CAD traded with a low of 1.0382 and with a high of 1.0515. No economic data is expected today.

USD/CAD - Last: 1.0490

Resistance

1.0515

Support

1.0465

1.0380

1.0300