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UFXBank Forex Outlook: Consumer Confidence Bodes Well for Dollar

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar strengthened versus most major currencies in Forex trading after U.S. consumer confidence rose more than expected in October, 50.2 vs. 49.3 forecast. This rise from a seven month low encourage investors to prefer the Dollar instead other assets. The NASDAQ and Dow Jones advanced by 0.26% and 0.05% respectively. Crude oil declined by 0.1%, closing at $82.55 a barrel and Gold (XAU) decreased by 0.1%, closing at $1338.60 an ounce. Today, Core Durable Goods Orders are expected to decline from 1.7% to 0.1%, and New Home Sales are expected at 295K vs. 288K prior.

Euro (EUR) – The Euro weakened against the Dollar for the first time in three days on speculation that an increase in debt purchases by the Federal Reserve will cause inflation to accelerate. The EUR/USD has been fluctuating around 1.3800 to 1.3900 levels during the past week, and therefore, the trend is not clear. Only if the pair crosses the 1.3950 line, will the Euro continue with its positive trend. Overall, EUR/USD traded with a low of 1.3825 and with a high of 1.3982. Today, German Prelim CPI is expected to rise from -0.10% to 0.10%.

EUR/USD – Last: 1.3811

Resistance

1.3878

1.3982

1.4080

Support

1.3750

1.3700

British Pound (GBP) – The Pound rose after the U.K. economy grew at double the pace economists had forecast for the third quarter, with GDP coming out at 0.8% vs. an expected 0.4%. The resistance of the GBP/USD on the one hour chart is 1.5900, and as long as the pair is trading below this level, the momentum is still negative for the pound. Overall, GBP/USD traded with a low of 1.5706 and with a high of 1.5896. No economic data is expected today.

GBP/USD - Last: 1.5822

Resistance

1.5900

1.5945

Support

1.5755

1.5685

1.5650

Japanese Yen (JPY) –The Yen slid from almost its strongest level in 15 years against the dollar amid concerns that Japanese authorities may renew action to weaken the currency. The USD/JPY has been trading around 81.00-81.50 area in the last few days and the main support line on the daily chart is located at 80.40. The momentum is still bearish as long as it‘s trading below the 10 moving average. Overall, USD/JPY traded with a low of 80.61 and with a high of 81.65. No economic data is expected today.

USD/JPY-Last: 81.74

Resistance

82.00

Support

81.30

80.80

80.45

Canadian dollar (CAD) – The Canadian Dollar weakened against the Dollar for the first time in three days as stocks and raw materials declined, reducing demand for currencies tied to economic growth. The support level of the USD/CAD on the daily chart is located at 1.0150, and if the USD/CAD breaks below this price level, a short position is preferred. Overall, USD/CAD traded with a low of 1.0181 and with a high of 1.0266. Today, BOC Gov Carney Speaks.

USD/CAD - Last: 1.0265

Resistance

1.0300

1.0355

Support

1.0210

1.0160