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Forex Daily News: GBP Still Trading Down

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar fluctuated against most major currencies after pending U.S. home resales unexpectedly rose, signaling the housing market may start to stabilize and boost investor appetite for higher yielding assets. The NASDAQ and Dow Jones advanced by 1.06% and 0.49% respectively, while crude oil rose by 1.5% to close at $75.02 a barrel. Gold (XAU) strengthened by 0.4%, closing at $1253.40 an ounce. Today, the Non-Farm Employment Change is expected to decline from -131K to -118K, the Unemployment Rate is expected at 9.6% vs. 9.5% prior, ISM Non-Manufacturing PMI is expected to weaken from 54.30 to 53.20.

EURO (EUR) – The Euro was near its strongest level in two weeks versus the Dollar after European Central Bank President, Jean-Claude Trichet, said a double-dip recession is “not in the cards.” Speaking after the ECB left its benchmark rate at 1 percent. As long the rate is above 1.2800 level a long position is preferred and the momentum is bullish. The next resistance on the one hour chart is located at 1.2860, and if the rate crosses this level, the euro will continue with its bullish trend. Overall, EUR/USD traded with a low of 1.2776 and with a high of 1.2848.Today, Retail Sales are expected to rise from 0.0% to 0.3%.

EUR/USD – Last: 1.2821

Resistance

1.2855

Support

1.2775

1.2700

1.2625

British Pound (GBP) – The Pound weakened for a third day against the Euro and declined against the Dollar as a report showed U.K. house prices slid the most in six months in August (-0.90% vs. -0.30% forecast), stoking speculation that the economic recovery may falter. The GBP/USD is still trading in negative range and still trading below the 10 moving average on the daily chart. Therefore the momentum is bearish, with the next support level on the one hour chart located at 1.5350. Overall, GBP/USD traded with a low of 1.5350 and with a high of 1.5451. Today, Services PMI is expected to be like the previous one at 53.1.

GBP/USD - Last: 1.5408

Resistance

1.5430

1.5490

1.5575

Support

1.5380

1.5330

Japanese Yen (JPY) –The Yen rose versus the major currencies in Forex Trading, on speculation the Japanese companies are bringing home overseas earnings before the first half of the fiscal year ends this month. The momentum of the USD/JPY is still strongly bearish and the next support on the daily chart is located at 83.50, thus a short position is preferred. Overall, USD/JPY traded with a low of 83.99 and with a high of 84.55. No economic data is expected today.

USD/JPY-Last: 84.31

Resistance

84.66

85.90

Support

84.00

83.65

Canadian dollar (CAD) – The Canadian Dollar depreciated versus the US Dollar after the biggest one-day rally in three months came on concern that U.S. job losses will stall the global economic recovery. As long as the USD/CAD is below 1.0550 levels, a short position is preferred. The next support on the daily chart is located at 1.0450, and if the price crosses this level, the trend will continue to be bearish. Overall, USD/CAD traded with a low of 1.0471 and with a high of 1.0555. No economic data is expected today.

USD/CAD - Last: 1.0544

Resistance

1.0555

1.0615

1.0675

Support

1.0520

1.0470