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UFXBank Forex Outlook: GBP/USD Touches 10-Month High

Written by UFXBank Research Team
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USD Dollar (USD) – The Dollar fell sharply against the other major currencies in Forex trading after the Federal Reserve announced a fresh round of asset purchases to kick start a slow growing U.S. economy. Initial Unemployment Claims in U.S. increased more than forecast to 457,000 vs. 437K forecast succeeded to support a weaker Dollar. NASDAQ and Dow Jones strengthened by 1.46% and 1.96% respectively, crude oil jumped by 2.1%, closing at 86.5$ a barrel, Gold (XAU) accelerated by 3.4%, reached to a new historic record (above 1390$ during the session) , closing at 1383.1$ an ounce. Today, Nonfarm Payrolls is expected to be 45K vs. -95K prior, Unemployment Rate is expected to remain at 9.60%, Fed Chairman Bernanke Speaks.

Euro (EUR) – The Euro traded near a nine month high against the Dollar as speculation the global economic recovery is gaining traction damped demand for the US Dollar as a refuge. In addition, the interest rate remain unchanged at 1.0% . The EUR/USD has a strong upwards trend, as long the price is above the 10 moving average and shows a positive RSI a long position is preferred. Overall, EUR/USD traded with a low of 1.4102 and with a high of 1.4282. Today, Retail Sales are expected to become positive 0.10% vs. -0.40% prior, German Factory Orders are expected to decline from 3.40% to 0.50%.

EUR/USD – Last: 1.4194

Resistance

1.4280

Support

1.4185

1.4100

1.4000

British Pound (GBP) – The Pound was higher against the Dollar, touching a ten month record after the release of U.S. data on Initial Jobless Claims which drifting higher yielding assets, moreover, the interest rate remain unchanged at 0.5%. The momentum of the GBP/USD is absolutely bullish, as long the price is trading above 1.6100 level a long position is preferred. Overall, GBP/USD traded with a low of 1.6087 and with a high of 1.6299. Today, PPI Input is expected to rise from 0.70% to 0.90%.

GBP/USD - Last: 1.6258

Resistance

1.6300

Support

1.6155

1.5960

1.5875

Japanese Yen (JPY) –The Yen strengthened against the Dollar, following the Federal Reserve’s announcement of a second round of quantitative easing, also the Unemployment Claims data support a weaker Dollar during the session. moreover, the interest rate remain unchanged at 0.10%. 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 still located at 80.00, the momentum is still bearish as long it‘s trading below the 10 moving average and the 82.00 level. Overall, USD/JPY traded with a low of 80.58 and with a high of 81.22. No economic data expected today.

USD/JPY-Last: 80.82

Resistance

81.15

81.60

Support

80.55

80.20

Canadian dollar (CAD) – The Canadian Dollar continued to rise versus the Dollar as oil jumped and stocks increased, drifting the Canadian as well. Ivey PMI came out at 56.7 vs. 65.8 forecast. The support level of the USD/CAD on the daily chart is located at 1.0000, if the USD/CAD breakdown this level a short position is preferred and the momentum continues to be positive for the Canadian Dollar Overall, USD/CAD traded with a low of 1.0010 and with a high of 1.0097. Today, Employment Change is expected to rise from -6.6K to 10.0K, Unemployment Rate is expected to remain at 8.0%,Building Permits is expected at 3.40% vs. -9.20% prior.

USD/CAD - Last: 1.0030

Resistance

1.0050

1.0110

1.0160

Support

1.0010