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UFXBank Forex Outlook: Dollar Touches 15-Year High on Yen

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar fluctuated against other major currencies and almost closed at its opening rate after the non- farm pay rolls came out at -95k, worse than an expected 1k. As a result of the data last Friday, the Federal Reserve might be buying more debt.  In addition, the unemployment Rate came out at 9.6%, better than the expected 9.7%.   The NASDAQ and Dow Jones strengthened by 0.77% and 0.53% respectively. Crude oil rose by 1%, closing at $82.66 a barrel. Gold (XAU) increased by 0.7%, closing at $1345.3 an ounce. Today, no economic data is expected.

EURO (EUR) –The Euro strengthened against the Dollar for a fourth week in the longest stretch of losses for the Dollar in almost two years. This comes as bigger than expected U.S. job cuts spurred speculation that the Federal Reserve will buy more debt. EUR/USD has encountered the 1.4000 level a couples of times and it has become the main resistance on daily chart. As long it’s above 1.3850, the momentum is remains bullish. Overall, EUR/USD traded with a low of 1.3832 and with a high of 1.3984. Today, The ECB President Trichet Speaks.

EUR/USD – Last:  1.3980

Resistance

1.4029

Support

1.3898

1.3822

1.3637

British Pound (GBP) – The Pound advanced against the Dollar in Forex trading after the Bank of England held the target for bond holdings at 200 billion pounds. This news and the disappointed data out of the US led investors to prefer the Pound over the Dollar. The GBP/USD is still fighting at the 1.6000 resistance line. Once it crosses it, the trend will continue in an uptrend .Overall, GBP/USD traded with a low of 1.5823 and with a high of 1.5966. Today, no economic data is expected.

GBP/USD - Last: 1.5947

Resistance

1.5966

1.6018

Support

1.5923

1.5845

1.5770

Japanese Yen (JPY) –The Yen touched a 15 year high against the Dollar on speculation that Federal Reserve policy makers will signal this week their willingness to buy more government debt to support economic growth. The USD/JPY has continued with its negative trend, therefore the momentum is bearish for the Dollar. The main resistance on the 1 hour chart is at 83.00 and if the price crosses this level, it could climb to 84.00. Overall, USD/JPY traded with a low of 81.72 and with a high of 82.56. No economic data is expected today.

USD/JPY-Last: 81.97

Resistance

82.42

82.79

83.25

Support

81.37

Canadian dollar (CAD) – The Canadian Dollar rose against the Dollar for the sixth straight week, the longest stretch since May 2009. This came after a weak U.S. jobs report was released, which strengthened oil and other assets that lifted the Canadian. In addition, the Employment Change came out worse than expected at -6.60K vs. 11.30K forecast and the Unemployment Rate  remains unchanged at 8.00%. The momentum of the USD/CAD is still strongly negative for the US Dollar, and as long the USD/CAD is below 1.0350 levels, the momentum is bearish. The next support on the 1 hour chart is located at 1.0050. Overall, USD/CAD traded with a low of 1.0068 and with a high of 1.0233. Today, no economic data is expected.

USD/CAD - Last: 1.0101

Resistance

1.0151

1.0219

1.0254

Support

1.0062