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EUR Falls to Five Month Low

UFXBank Research from UFX Bank at 01/21/10


Daily Review 21/01/2010

USD Dollar (USD) – The Dollar strengthened versus most majors after the TIC Long-Term Purchases hit estimates and Building permits in the U.S. unexpectedly jumped in December, coming at 0.65M vs. 0.59M forecast and Wholesale prices in the U.S. rose at a slower pace in December, showing the economy is recovering without the immediate threat of inflation. NASDAQ and Dow Jones fell by 1.25% and 1.14% respectively. Crude oil dropped by 1.78%, closing at 77.62$ a barrel and Gold(XAU) fell by 2.43% closed at 1112.60$ an ounce. Today, Unemployment Claims are expected at 441K vs. 444K prior and Philly Fed Manufacturing Index is expected at 18.1 vs. 22.5 prior.

EURO (EUR) – The Euro fell to a five-month low versus the Dollar as Greece’s bonds tumbled and German PPI which came worse than expected continued to push the currency down. Overall, EUR/USD traded with a low of 1.4081 and with a high of 1.4288. Euro's momentum is clearly downward; the main support on the daily chart is 1.4000. Today, German Flash Services PMI is expected at 53.1 vs. 52.7 prior and Services PMI expected at 54.1 vs. 53.6 prior.
EUR/USD – Last: 1.4088

Resistance 1.4137 1.4220 1.4305
Support 1.4065

British Pound (GBP) –The Pound weakened versus the Dollar after U.K. unemployment fell at the fastest pace since April 2007 last month as the economy showed signs of emerging from its worst recession on record. Overall, GBP/USD traded with a low of 1.6244 and with a high of 1.6369. As long the GBP is below 1.6300 a short position is preferred. Today, CBI Industrial Order Expectations are expected to decrease from -42 to -39.
GBP/USD - Last: 1.6267

Resistance 1.6310 1.6380 1.6460
Support 1.6244

Japanese Yen (JPY) –The Yen rose against most majors as global stocks slid on disappointing corporate earnings and steps by China to limit bank lending, reducing demand for riskier assets. Until USD/JPY is able to remain below 92.00 a short position is preferred. Overall, USD/JPY traded with a low of 90.79 and with a high of 91.46. No economic data expected today.
USD/JPY-Last: 91.49

Resistance 91.55 92.05
Support 91.20 90.80 90.30

Canadian dollar (CAD) – The Canadian Dollar dropped by the most in almost three months versus the Dollar as oil fell and a report showed inflation rose less in December than forecast, reducing the chance the central bank will raise interest rates before the second half. In addition, CPI came out worse than expected at -0.3% vs. -0.2% forecast. Overall, USD/CAD traded with a low of 1.0312 and with a high of 1.0489. On the daily graph we can see it broke 1.0400 levels therefore a long position is preferred. Today, BOC Monetary Policy Report and BOC Press Conference and Wholesale Sales are expected at 0.4% vs. 0.3% prior.
CAD/USD - Last: 1.0465

Resistance 1.0490
Support 1.0440 1.0300 1.0250

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