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Dollar Rises, But Not Against JPY

UFXBank Research from UFX Bank at 01/27/10


Daily Review 27/01/2010

USD Dollar (USD) – The Dollar rose across the board with the exception of the Yen. Worries about the economic recovery pushed the demand for safe assets, despite an increase in consumer confidence that came out 55.9 better than expected 53.5. Wall Street finished almost unchanged. Dow Jones lost -0.03% and the NASDAQ fell -0.32% as better-than-expected data on consumer confidence was not enough for investors. Crude oil is back below $75 a barrel. Gold (XAU) trades near $1,100 an ounce. Investors today are waiting for the rate decision which is expected to stay at 0.25% and new home sales.
EURO (EUR) – The Dollar advanced versus the Euro. The German IFO Climate Index came out 95.8 better than expected 95 but it did not help the Euro to gain eventually. If the pair still holds above the 1.4030 level rebound to 1.42 could be seen. Overall, EUR/USD traded with a low of 1.4042 and with a high of 1.4178. Today, the German CPI is expected at -0.2% vs. 0.8% previously.
EUR/USD – Last: 1.4070

Resistance 1.4135 1.418 1.422
Support 1.403 1.4 1.396

British Pound (GBP) – Cable lost gains against the Dollar after weak growth data in the fourth quarter was released. 4th quarter GDP came out 0.1% worse than expected 0.4%. The BBA Mortgage Approvals came out 45.9K as expected. If the pair still holds above the 1.6080 level rebound to 1.6220 could be seen. Overall, GBP/USD traded with a low of 1.6091 and a high of 1.6262. Today, the CBI DTS is expected at 12 vs. 13 previously.
GBP/USD - Last: 1.6150

Resistance 1.62 1.625 1.6285
Support 1.6095 1.6025 1.5955

Japanese Yen (JPY) – The Yen was the best performer among majors and may extend advances versus most of their major counterparts on speculation China will take further steps to cool its economy, discouraging demand for higher yielding assets. The Trade Balance came out 0.52T worse than expected 0.61T. If the pair holds below 89.80, an acceleration of the downtrend could be seen. Overall, USD/JPY traded with a low of 89.33 and a high of 90.53. Today, the Retail Sales is expected at 0.3% vs. -1% previously.
USD/JPY-Last: 89.70

Resistance 90.05 90.5 90.8
Support 89.35 89.05 88.8

Canadian dollar (CAD) – The Canadian currency touched a five-week low after Chinese commercial banks have begun tightening credit, discouraging investors’ appetite for high yield currencies to growth. The USD/CAD is in an uptrend and a break above the 1.07 level is expected. Overall, USD/CAD traded with a low of 1.0545 and with a high of 1.0689.No economic data expected today.
USD/CAD - Last: 1.063

Resistance 1.0695 1.073 1.0765
Support 1.0585 1.053 1.049

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