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UFXBank Forex Outlook: Dollar Down Despite Good Home Sales

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar remained down against most of the major currencies despite home sales data being better the expected at 4.53M vs 4.25M forecast. The dollar continues to be in the shadow of the G20 summit, remaining weak against the majors in Forex trading. The NASDAQ and Dow Jones advanced by 0.46% and 0.28%, respectively. Crude oil gained 1%, closing at $82.52 a barrel, and Gold (XAU) increased by 1.1%, closing at $1340 an ounce. Today, CB Consumer Confidence is expected at 49.00 vs. 48.5 prior.

Euro (EUR) – The Euro strengthened against the dollar with Industrial New Orders exceeding expectation at 5.3% vs 2.1% prior, resulting in a stronger Euro. The last few days have seen the pair within a daily range, with a support of 1.3856 and a resistance of 1.4049. As long as the pair remains above levels of 1.3900, the trend will remain positive. Overall, EUR/USD traded with a low of 1.3935 and with a high of 1.4079. No economic data is expected today.

EUR/USD – Last: 1.39619

Resistance

1.3972 

1.4039 

1.4080 

Support

1.3907 

1.3856 

British Pound (GBP) – The Pound strengthened against the dollar despite the Mortgage Approvals coming out worse than expected at 31.1K vs. 31.6K forecast. The buyers outweighed the sellers in search for higher yielding assets in the GBP.  The momentum for the pound remains negative despite the pair’s efforts to break the daily moving average at around 1.5776. The trend continues to be bearish with a strong support of 1.5650. Overall, GBP/USD traded with a low of 1.5677 and with a high of 1.5772. Today, Prelim GDP q/q is expected 0.4% vs. 1.2% prior, and later on MPC Member Posen will speak.

GBP/USD - Last:  1.5731

Resistance

1.5749

1.5772

Support

1.5715

1.5689

Japanese Yen (JPY) –The Yen reached a 15 year high against the dollar. The dollar weakened against all the major currencies today, which only supported a stronger Yen.  The Yen continued to strengthen against the dollar for the sixth consecutive day and reached highs that were last seen in 1995. The trend on the pair is still bearish, although we might see some minor corrections. Overall, USD/JPY traded with a low of 80.40 and with a high of 81.32. No economic data is expected today.

USD/JPY-Last: 80.78

Resistance

80.83

80.90

Support

80.65

80.40

Canadian dollar (CAD) – The Canadian Dollar strengthened to reach a weekly high against the US dollar as a result of government reports last week that hinted about inflation and retail sales exceeding economist expectations. The strengthened commodities support a strong Canadian dollar. The USD/CAD broke its moving average and entered its second day of negative performance; the trend continues to be bearish below the level 1.0220. Overall, USD/CAD traded with a low of 1.0154 and with a high of 1.0258. Today, BOC Gov Carney Speaks.

USD/CAD - Last: 1.0199

Resistance

1.0208

1.0236

Support

1.0178

1.0162

1.0154