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UFXBank Forex Outlook: Pound Drops vs Dollar

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar was mixed in Forex trading on Friday, as investors waited to see the outlook of the G20 summit, which vowed in the end to avoid weakening currencies to encourage exports. The NASDAQ advanced by 0.80% and the Dow Jones weakened   by 0.13%. Crude oil rose by 1.4%, closing at $81.69 a barrel. Gold (XAU) decreased by $0.50, closing at $1325 an ounce. Today, Fed Chairman Bernanke Speaks, and Existing Home Sales are expected to rise from 4.13M to 4.25M.

Euro (EUR) – The Euro rose against the Dollar after the Group of 20 finance ministers and central bankers vowed to refrain from weakening currencies to support exports. The EUR/USD has fluctuated around 1.3900 levels during the past week, and as long as it’s above 1.3900 levels, the momentum continues to be positive for the Euro. Overall, EUR/USD traded with a low of 1.3858 and with a high of 1.3972. Today, Industrial New Orders are expected at 2.1% vs. -2.0% prior.

EUR/USD – Last: 1.4033

Resistance

1.4050

1.4160

Support

1.3855

1.3700

British Pound (GBP) – The Pound traded its biggest weekly loss against the dollar since August. This comes on speculation that this weekend’s Group of 20 meeting in South Korea may result in an accord that will support the Dollar more than the pound. The trend of the GBP/USD on the daily chart has been bearish over the last few days, but still facing a support around 1.5600. Overall, GBP/USD traded with a low of 1.5651 and with a high of 1.5750. Today, BBA Mortgage Approvals are expected at 31.60K vs. 31.80K prior.

GBP/USD - Last: 1.5746

Resistance

1.5878

1.6000

1.6110

Support

1.5650

Japanese Yen (JPY) –The Yen closed almost unchanged against the Dollar after the resolutions of the G20. The USD/JPY has been trading around 81.00-81.50 area in the last few days. The main support line on the daily chart is located at 81.00 and the momentum is still bearish as long as it‘s trading below the 10 moving average. Overall, USD/JPY traded with a low of 80.99 and with a high of 81.50. No economic data is expected today.

USD/JPY-Last: 81.06

Resistance

81.50

82.00

Support

80.85

Canadian Dollar (CAD) – The Canadian Dollar fluctuated against the Dollar as the Bank of Canada signaled interest rate increases are on hold as the nation’s economic recovery may be weaker than expected. The support level of the USD/CAD on the daily chart is located at 1.0200, and if the USD/CAD breaks below this level, a short position is preferred. Overall, USD/CAD traded with a low of 1.0223 and with a high of 1.0302. No economic data is expected today.

USD/CAD - Last: 1.0210

Resistance

1.0300

1.0375

Support

1.0165

1.0090

1.0000