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The Dollar fell sharply across the board as stocks and commodities soared

UFXBank Research from UFX Bank at 02/17/10


Daily Review 17/02/2010

USD Dollar (USD) – The Dollar fell sharply across the board as stocks and commodities soared. The Dollar failed to rise even better than expected data on the NY Empire State Manufacturing Index that came out 24.9 vs. expected 17 and in the TIC Net Long-Term Transactions that came out 63.3B vs. expected 50B. Markets in the US rose sharply. The Dow Jones gained 1.68% and the NASDAQ rose 1.4%. Commodities also rallied. Crude oil rallied rising more than 4% closing above 77$ a barrel. The Gold (XAU) jumped extending its recovery closing at 1118$ an ounce. Today, The Building Permits is expected at 0.62M vs. 0.65M previously and later FOMC Meeting Minutes is expected.

EURO (EUR) – The Euro rallied against majors. The pair is recovering after falling sharply during the last few weeks. The Euro is still under pressure but Greece said it hasn’t requested a bailout from the European Union, renewing demand for the European currency. The German ZEW Economic Sentiment came out 45.1 better than expected 42.5. The near term uptrend run could be possible until 1.397 level. Overall, EUR/USD traded with a low of 1.3588 and with a high of 1.3779. Today, no important economic data is expected.

EUR/USD – Last: 1.3762

Resistance 1.3805 1.384 1.3885
Support 1.3685 1.3645 1.359

British Pound (GBP) – The GBP has made big gains against the Dollar and has consolidated above 1.5720. The CPI came out 3.5% worse than expected 3.6% and the Core CPI came out 3.1% also worse than expected 3.2%. If the GBP sustains above the 1.5720 level, it might extend its uptrend to the 1.5920 area. Overall, GBP/USD traded with a low of 1.5626 and with a high of 1.5793. Today, The Claimant Count Change is expected at -15K vs. -15.2K previously .The Average Earnings Index is expected at 1.2% vs. 1.6% previously and later MPC Meeting Minutes is expected.

GBP/USD - Last: 1.5772

Resistance 1.581 1.585 1.5875
Support 1.5725 1.5665 1.5625

Japanese Yen (JPY) – The Yen fell sharply against most of the currencies but despite increased demand for risky assets, the USD/JPY is under pressure. The Tertiary Industry Activity Index came out -0.9% worse than expected -0.2%. In order the pair to extend its increasing it has to trade above the 90.5 level otherwise a rebound to 89.8 areas might be possible. Overall, USD/JPY traded with a low of 89.69 and with a high of 90.50. Today, no economic data expected.

USD/JPY-Last: 90.3

Resistance 90.55 90.75 91.1
Support 89.75 89.55 89.35

Canadian dollar (CAD) – The Dollar extended its decline against the Canadian Dollar. Canada’s dollar increased to the highest level in February as crude oil advanced. The Manufacturing Sales came out 1.6% worse than expected 2%. Holding below 1.0480 levels might extend gains in the Canadian Dollar to 1.0320 zones. Overall, USD/CAD traded with a low of 1.0408 and with a high of 1.0497. Today, The Wholesale is expected at 0.6% vs. 2.5% previously.

USD/CAD - Last: 1.0444

Resistance 1.048 1.05 1.0545
Support 1.0375 1.0335 1.0315

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