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UFXBank Research from UFX Bank at 01/28/10

 

Daily Review 28/01/2010

USD Dollar (USD) – The Dollar strengthened versus most majors. Sales of new homes in the U.S. unexpectedly dropped in December and the FOMC members kept the interest rate unchanged at 0.25%. The FOMC said they will keep short-term interest rates near zero in an effort to continue supporting the shaky economic recovery, but made no changes to its $1.25 trillion program to buy mortgage-backed securities, which was created to support the housing market. That disappointed traders who had bet for an upgrade of the program after a slew of surprisingly weak housing data this week. NASDAQ and Dow Jones rose by 0.80% and 0.41% respectively. Crude oil fell by 1.4%, closing at 73.67$ a barrel. Gold (XAU) decreased by 1.3%, closing at 1084.50$ an ounce. Today, Unemployment Claims are expected to decline from 482K to 451K and Core Durable Goods Orders are expected to rise from 0.2% to 0.4%. Also today, we are expecting to hear the results of the Fed Chairman Nomination Vote.
EURO (EUR) – The Euro weakened to a six-month low against the Dollar after German Prelim CPI came out worse than expected at -0.6% vs. -0.2% forecast. The EUR/USD'S momentum is downward all the way till it breaks 1.4210 .Overall, EUR/USD traded with a low of 1.3930 and with a high of 1.4097.Today, German Unemployment Change is expected to rise from -3K to 17k.
EUR/USD – Last: 1.4017

Resistance 1.4040 1.4106 1.4192
Support 1.3957



British Pound (GBP) –The Pound slightly rose versus the Dollar trading with a low of 1.6107 and with a high of 1.6244. The GBP/USD is trapped between 1.6265 and 1.6075 in the last few days therefore the momentum is unclear until it breaks one of this level. CBI Realized Sales released worse than expected -8 vs. 11 forecast.
GBP/USD - Last: 1.6211

Resistance 1.6230 1.6268
Support 1.6145 1.6093



Japanese Yen (JPY) –The Yen rose against higher-yielding currencies as speculation the global economic recovery is slowing spurred demand for Japan’s currency as a refuge. Retail Sales came out worse than expected at -0.3% vs. 0.3% forecast . On the daily graph of the USD/JPY we can see a clearly down trend therefore the momentum is still bearish till it breaks the resistance at 90.70 levels. Overall, USD/JPY traded with a low of 89.14 and with a high of 90.08.
USD/JPY-Last: 90.37

Resistance 90.55 91.86
Support 89.85 89.15



Canadian dollar (CAD) – The Canadian Dollar fell versus the Dollar, trading at almost the lowest level in five weeks as crude oil dropped and stocks fluctuated amid concern the international economic recovery is slowing. The main resistance on the daily graph is 1.0710 if it doesn't break this level the bullish momentum will stop. Overall, USD/CAD traded with a low of 1.0608 and with a high of 1.0688. No economic data expected today.
CAD/USD - Last: 1.0608

Resistance 1.0683
Support 1.0593 1.0533 1.0466