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UFXBank Forex Outlook: Pound Trades Strong Against EUR, USD

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar fell against most major currencies in Forex trading as the Fed said it would buy $600 billion of Treasuries under a policy know as quantitative easing. This statement succeeded to drift the stock markets and higher yielding assets. In addition, Interest Rate remained at 0.25%, ADP Non Farm Employment Change came out better than expected at 43K vs. 21K forecast, and the ISM Non-Manufacturing PMI came out beating expectations at 54.3 vs. 53.5 forecast. The NASDAQ and Dow Jones advanced by 0.27% and 0.24% respectively. Crude oil strengthened by 1.0%, closing at $84.69 a barrel, Gold (XAU) decreased by 1.4%, closing at $1337.60 an ounce. Today, Unemployment Claims are expected at  437K vs. 434K prior, Nonfarm Productivity  is expected to become positive from -1.80% to 0.60%.

Euro (EUR) – The Euro rose to a nine month high versus the Dollar after the Federal Reserve said it will pump more money into the economy by boosting asset purchases to spur inflation and employment. The EUR/USD has a strong resistance at the 1.4050 - 1.4100 levels if it stays above this price, the momentum continues to be bullish. Overall, EUR/USD traded with a low of 1.3992 and with a high of 1.4191. Today, the Interest Rate Decision is expected to remain at 1.00%, and the ECB Press Conference will happen today.

EUR/USD – Last:

Resistance

Support

British Pound (GBP) – The Pound gained versus the Dollar and the Euro after a report showed that U.K. services growth unexpectedly accelerated in October (53.2 vs. 52.4 forecast), bolstering the view that the Bank of England will keep its policy unchanged tomorrow. The resistance of the GBP/USD on the daily chart is 1.6080, and as long as the pair is trading above this level, the momentum is bullish for the pound. Overall, GBP/USD traded with a low of 1.6007 and with a high of 1.6176. Today, the Interest Rate Decision is expected to remain at 0.50%, and Halifax HPI is expected to rise from -3.6% to 0.4%.

GBP/USD - Last:

Resistance

Support

Japanese Yen (JPY) –The Yen weakened from a near 15 year high against the Dollar as signs the worldwide economic recovery is gathering momentum boosted Asian shares, sapping demand for the Japanese currency as a refuge.  The USD/JPY has been trading around 80.00-81.00 area in the last few days. The main support line on the daily chart is located at 80.00, and the momentum is still bearish as long as it‘s trading below the 10 moving average and the 82.00 level. Overall, USD/JPY traded with a low of 80.60 and with a high of 81.58. No economic data is expected today.

USD/JPY-Last:

Resistance

Support

Canadian dollar (CAD) – The Canadian Dollar advanced for a fifth day as stocks rose following the Federal Reserve’s announcement of debt purchases, encouraging demand for assets related to economic growth. The support level of the USD/CAD on the daily chart is located at 1.0000, if the USD/CAD breakdown below this level, a short position is preferred and the momentum continues to be negative for the Dollar. Overall, USD/CAD traded with a low of 1.0045 and with a high of 1.0157. Today, Ivey PMI is expected at 69.70 vs. 70.30 prior.

USD/CAD - Last:

Resistance

Support