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UFXBank Forex Outlook: Columbus Saves the USDay

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar rose against the other major currencies on thin trading volumes, partly as a result of the Columbus Day holiday in the US. However, the Dollar sentiment remained negative as investors with Federal Reserve stimulus concerns, awaited the minutes of the Federal Reserve’s policy meeting.  NASDAQ and Dow Jones were very stable due to Columbus day, advancing by 0.02% and 0.03%, respectively. Crude oil weakened by 0.9%, closing at $81.90 a barrel. Gold (XAU) increased to a new historic record, strengthening by 0.7%, and closing at $1354.40 an ounce. Today, FOMC Meeting Minutes are to be released.

EURO (EUR) – The Euro declined against the Dollar after a quiet day of Forex trading, where there was little data that could affect the symbol. It probably declined as a correction on this pair, because technical indicators showed it advanced last week to an eight month high. The momentum of the EUR/USD is still strongly bullish for the euro, but the pair has fluctuated around 1.3900 levels during the past three days. As long as it’s above 1.3800 levels, the momentum continues to be positive. Overall, EUR/USD traded with a low of 1.3866 and with a high of 1.3999. Today, ECB President Trichet Speaks.

EUR/USD – Last: 1.3880

Resistance

1.3950

1.4030

Support

1.3830

1.3750

1.3640

British Pound (GBP) – The Pound weakened against the Dollar and Euro as investors speculated that the Bank of England will restart its debt-purchase program to bolster the economic recovery. The main trend of the GBP/USD is bullish facing a resistance around 1.6000, and if the price crosses this level, the pair will continue with its uptrend. Overall, GBP/USD traded with a low of 1.5867 and with a high of 1.5963. Today, CPI is expected to remain at 3.1% and the Trade Balance is expected to weaken from -8.70B to -8.0B.

GBP/USD - Last: 1.5906

Resistance

1.5965

1.6000

Support

1.5865

1.5820

1.5770

Japanese Yen (JPY) –The Yen weakened from a 15 year high against the Dollar after no news was released that could influence this pair. Investors are waiting for the minutes of the Federal Reserve’s policy meeting for September. The USD/JPY traded in a very short range, encountering a strong support level at 82.00, and as long as it trades below 82.60, a short position is preferred. Overall, USD/JPY traded with a low of 81.82 and with a high of 82.18. No economic data is expected today.

USD/JPY-Last: 81.92

Resistance

86.00

89.00

Support

81.72

Canadian dollar (CAD) – The Canadian Dollar weakened versus the US Dollar as crude oil prices retreated from recent highs, weakening the Canadian Dollar as well. The momentum of the USD/CAD is still strongly negative for the US Dollar, despite the US Dollar rising yesterday. As long as the USD/CAD below 1.0250 levels, the momentum is bearish and the next support on the daily chart is located at 1.0060. Overall, USD/CAD traded with a low of 1.0093 and with a high of 1.0150. No economic data is expected today.

USD/CAD - Last: 1.0144

Resistance

1.0150

1.0235

Support

1.0060