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UFXBank Forex Outlook: Dollar Down on Jobs Data

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar was mixed against the major currencies as the release of better than expected U.S. data on initial jobless claims which came out 445K vs. 454K expectations and the announcements of the rate decisions from UK and Europe support fluctuated trend.  NASDAQ strengthened by 0.13% and Dow Jones weakened by 0.17%, crude oil fell by 1.9%, closing at 81.67$ a barrel, Gold (XAU) decreased by  0.95% , closing at 1335$ an ounce. Today, Non-Farm Employment Change is expected to become positive from -54K to 3K, Unemployment Rate is expected to be 9.7% vs. 9.6% prior.

EURO (EUR) – The Euro closed unchanged versus the Dollar after reaching the strongest level in eight month as Industrial production in Germany Europe’s largest economy increased more than three times in August (1.7% vs. 0.4% forecast). In addition, The European Central Bank left its main interest rate unchanged at 1% for the 17th consecutive month amid caution over the economic outlook. The momentum of the EUR/USD is still strongly bullish for the euro, as long it’s above 1.3800 level a long position is preferred, the next resistance line on the daily chart is 1.4025. Overall, EUR/USD traded with a low of 1.3857 and with a high of 1.4029. Today, German Trade Balance is expected at 12.7B vs. 12.2B prior.

EUR/USD – Last: 1.3950

Resistance

1.4030

Support

1.3850

1.3640

1.3560

British Pound (GBP) – The Pound touched the highest level in eight months in Forex trading versus the Dollar (above 1.6000) after the Bank of England left interest rates at a record low (0.5%) and refrained from increasing its bond buying program to stimulate the economy. The GBP/USD couldn’t break the resistance that he has at 1.6000 during yesterday’s session but the momentum is still bullish as long the price above 1.5750,and the support on the one hour chart is 1.5800 .Overall, GBP/USD traded with a low of 1.5826 and with a high of 1.6018. Today, PPI Input is expected to rise from -0.5% to 0.3%.

GBP/USD - Last: 1.5890

Resistance

1.5930

1.6020

Support

1.5830

1.5750

1.5670

Japanese Yen (JPY) –The Yen advanced to a 15 year high against the Dollar amid growing expectations the Federal Reserve will expand credit easing to sustain the U.S. recovery.  The USD/JPY has continued with its negative trend, therefore the momentum is bearish for the Dollar, the main support on the daily chart is 82.00. Overall, USD/JPY traded with a low of 82.11 and with a high of 83.03. No economic data expected today.

USD/JPY-Last: 82.32

Resistance

82.51

83.15

83.90

Support

82.00

Canadian dollar (CAD) – The Canadian Dollar declined from a five month high versus the Dollar after building permits in August fell more than four times as much as expected, came out at -9.2% vs. -1.9% forecast. The momentum of the USD/CAD is still strongly negative for the US Dollar although the US Dollar rose yesterday, as long the USD/CAD below 1.0400 levels the momentum is bearish, the next support on the daily chart is located at 1.0060. Overall, USD/CAD traded with a low of 1.0077 and with a high of 1.0211.Today, Employment Change Is expected to weak from 35.8K to 11.3K, Unemployment Rate is expected to remain at 8.1%, Housing Starts are expected at 180K vs. 183K prior.

USD/CAD - Last: 1.0162

Resistance

1.0210

1.0275

1.0345

Support

1.0060