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Forex Daily News: August 24, 2010 - USD Up on Risk Concerns

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar gained against most of its majors in Forex Trading as risk aversion continued amid fears that the rate of global economic growth is slowing down. The NASDAQ and Dow Jones weakened by 0.92% and 0.38%, respectively. Crude oil weakened by 1.0% to close at $73.10 a barrel, and Gold (XAU) declined by 0.05%, closing at 1$228.50 an ounce. Today, Existing Home Sales are expected to weaken from 5.37M to 4.68M.

EURO (EUR) – The Euro reached the lowest level versus the Dollar in almost six weeks after data showed services and manufacturing growth slowed in the 16 nation Euro area. German Manufacturing PMI came out at 58.2 vs. the 60.9 forecast, and European Manufacturing PMI came out at 55.0 vs. an expected 56.3. The pair has been trading downwards since August and continues to trade under the 10 moving average on the daily chart, therefore the momentum is still bearish and a short position is preferred. Overall, EUR/USD traded with a low of 1.2647 and with a high of 1.2729. Today, Industrial New Orders are expected at 1.6% vs. 3.8% prior.

EUR/USD – Last: 1.2636

Resistance

1.2725

1.2833

1.2922

Support

1.2620

British Pound (GBP) – The Pound was near the lowest level against the dollar in almost four weeks as a quarterly gauge of business confidence weakened, further stoking fears that the economic recovery may be slowing. The GBP/USD continues with its stable trend. The next support on the daily chart is at 1.5480 and if the price breaks this level, a short position is preferred. Overall, GBP/USD traded with a low of 1.5499 and with a high of 1.5619. Today, BBA Mortgage Approvals are expected at 35.3K vs. 34.8K prior.

GBP/USD - Last: 1.5447

Resistance

1.5500

1.5620

1.5700

Support

1.5435

Japanese Yen (JPY) –The Yen rose against all majors as signs the global economy is slowing boosted demand for the currency as a refuge. As long the USD\JPY is trading below the 86.00 level, a short position is preferred and the momentum is clearly bearish. The next support on the daily chart is located at 84.60. Overall, USD/JPY traded with a low of 85.09 and with a high of 85.64. No economic data is expected today.

USD/JPY-Last: 85.06

Resistance

85.45

85.70

86.00

Support

84.90

Canadian dollar (CAD) – The Canadian Dollar touched the weakest level in a month as crude oil declined and traders reprised their expectations for a Bank of Canada interest rate increase, in light of economic data that suggests a slowing recovery. As long as the USD/CAD is above 1.0450 levels, a long position is preferred. The next resistance on the one hour chart is located at 1.0535 and if the price crosses, this level the trend will continue to be bullish. Overall, USD/CAD traded with a low of 1.0444 and with a high of 1.0530. Today, Core Retail Sales are expected to weaken from 3.8% to 1.6%.

USD/CAD - Last: 1.0550

Resistance

1.0570

Support

1.0445

1.0380

1.0300