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UFXBank Forex Outlook: EUR/USD Up on FED Minutes

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar was down against the other major currencies as Federal Reserve policymakers agreed yesterday about purchases of Treasury securities and agreed to boost inflation expectations as ways to add stimulus. Doing so would cause the stock markets to erase losses and that would support a weaker Dollar. The NASDAQ and Dow Jones advanced by 0.65% and 0.09%. Crude oil weakened by 0.7%, closing at $81.67 a barrel, and Gold (XAU) decreased by 0.6% to close at $1346.70 an ounce. Today, Fed Chairman Bernanke Speaks.

Euro (EUR) – The Euro erased its drop and succeeded to strengthen versus the Dollar in Forex trading as sentiment on the U.S. dollar weakened after the Federal Reserve’s meeting. The momentum of the EUR/USD is still strongly bullish for the euro but the pair has been fluctuating around 1.3900 levels for the past four days. As long as it’s above 1.3750 levels, the momentum continues to be positive. Overall, EUR/USD traded with a low of 1.3775 and with a high of 1.3939. Today, Industrial Production is expected at 0.70% vs. 0.10% prior.

EUR/USD – Last: 1.3965

Resistance

1.4030

Support

1.3900

1.3775

1.3640

British Pound (GBP) – The Pound extended its losses against the Dollar, falling to a 5 day low after Bank of England monetary policy committee member David Miles made negative remarks about the economic forecast. The main trend of the GBP/USD on the daily chart is bullish and is still facing resistance around 1.6000. The pair has declined in the past two days and therefore, if it breaks below the 1.5780 rate, it could decline to the 1.5700 area. Overall, GBP/USD traded with a low of 1.5753 and with a high of 1.5917. Today, Claimant Count Change is expected to rise from 2.30K to 3.90K and MPC Member Sentence will speak.

GBP/USD - Last: 1.5817

Resistance

1.5860

1.5965

1.6020

Support

1.5750

Japanese Yen (JPY) –The Yen remained higher against the Dollar as minutes of the Federal meeting showed the central bank was prepared to ease monetary policy.  The USD/JPY has broken the support level at 82.00 and therefore, the momentum continues to be bearish, with the 10 moving average supporting a bearish trend as well. Overall, USD/JPY traded with a low of 81.65 and with a high of 82.31. No economic data is expected today.

USD/JPY-Last: 81.80

Resistance

82.00

82.55

83.20

Support

81.40

Canadian dollar (CAD) – The Canadian Dollar rose versus the US Dollar as the Federal Open Market Committee minutes showed the central bank moved closer to further easing monetary policy and global stocks rebounded from the day’s lows. The momentum of the USD/CAD is still strongly negative for the US Dollar, and as long as the USD/CAD is below 1.0250, a short position is preferred. Overall, USD/CAD traded with a low of 1.0089 and with a high of 1.0183. No major economic data is expected today.

USD/CAD - Last: 1.0095

Resistance

1.0125

1.0185

1.0235

Support

1.0060