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UFXBank Research from UFX Bank at 12/22/09


Daily Review 22/12/2009

USD Dollar (USD) – The Dollar gained across the board continuing to rally as speculations rise that the Federal Reserve will withdraw the stimulus it offered to slow the recession. The Dollar rose despite an increase in stocks in Europe and Wall Street showing that the inverse correlation with equities continues to break down. Stocks rose sharply in the U.S. NASDAQ rose to fresh year highs and finished with a gain of 1.17% and Dow Jones added 0.83%. The Gold (XAU) fell to fresh monthly lows closing at 1093$ an ounce. Crude Oil fell 1.2% and closed at 72.5$ a barrel. Today, Final 3rd quarter GDP is expected unchanged with 2.8% and Existing Home Sales are expected with 6.25M vs. 6.1M previously.

EURO (EUR) – The Euro continued lower, closing on a bearish note below the 1.43 level, suggesting it might keep going until the 1.40 level. Ongoing worries over Greece's debt problems had provided some safe-haven strength for the Dollar against the Euro. Overall, EUR/USD traded with a low of 1.4264 and a high of 1.4372. No major economic expected in the Euro today.
EUR/USD - Last: 1.4280

Resistance 1.44 1.45 1.457
Support 1.426 1.4175 1.408

British Pound (GBP) – Dollar strength has extended the Pound weakness which failed to hold above 1.61 reaching a fresh 2 month low. If the pair remains below the 1.6050 level it might easily break under the 1.6 level and fall to the 1.58 zone. Overall, GBP/USD traded with a low of 1.6028 and a high of 1.6123. Today, Final 3rd quarter GDP expected at -0.1% vs. -0.3% previously. Current Account is expected at -8B vs. -11.4B previously.
GBP/USD - Last: 1.6260

Resistance 1.6125 1.62 1.625
Support 1.6 1.59 1.579

Japanese Yen (JPY) –The Yen declined modestly versus the other majors. USD/JPY breached the 91 resistance level hitting a 6 week high. Japan’s exports fell at the slowest pace in 14 months in November as demand from Asia supported the recovery from recession. Overall, USD/JPY traded with a low of 90.12 and a high of 91.22. Japanese banks will be closed today due to the Emperor's Birthday. Low liquidity and irregular volatility are expected.
USD/JPY-Last: 91.40

Resistance 91.55 92.25 93.05
Support 90.75 90.35 89.95

Canadian Dollar (CAD) – The Canadian Dollar was among the few currencies that rose against the Dollar as global equities rose. The Core Retail Sales came out 0.2% worse than 0.5% expected. Overall, USD/CAD traded with a low of 1.0535 and a high of 1.0697. No economic data expected today.

USD/CAD - Last: 1.0670

Resistance 1.0643 1.067 1.07
Support 1.0585 1.055 1.05

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