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USD Consolidates its Uptrend

UFXBank Research from UFX Bank at 12/23/09


Daily Review 23/12/2009

USD Dollar (USD) – The Dollar consolidating its uptrend as it rose to the highest level in month across the board. The GDP in the U.S. for the 3Q came out 2.2% worse than expected 2.8%. An industry report showed Existing Home Sales climbed in November to 6.54M more than economists estimated at 6.25M. Stocks finished with gains in the U.S. The Nasdaq posted new highs for the year and the S&P 500 finished at the highest level in 14 months. The Dow Jones rose 0.46% and the Nasdaq gain 0.69%. The Gold (XAU) tumbled to the lowest level in a month reaching the 1075$ level but managed to close at 1086$ an ounce. Crude oil managed to close above 74$ a barrel even though the OPEC decided to keep unchanged the production level. Today, The Core PCE Price Index expected at 0.1% vs. 0.2% previously. The Personal Spending expected unchanged at 0.7%. The Michigan Consumer Sentiment Index expected at 74.2 vs. 73.4 previously. The New Home Sales expected at 439K vs. 430K previously.
EURO (EUR) – Greenback rose against the Euro for the sixth consecutive session. EUR/USD holds below 1.43. The dollar erased a decline versus the euro that came after the U.S. government cut its final estimate for third-quarter economic growth. The Gfk German Consumer Climate came out 3.3 worse than expected 3.7. Overall, EUR/USD traded with a low of 1.4217 and a high of 1.4330. No major economic data expected in the Euro today.
EUR/USD - Last: 1.4250

Resistance 1.435 1.4425 1.45
Support 1.4215 1.4175 1.408

British Pound (GBP) – The pound fell under the 1.6 level and erased gains versus the dollar after a report showed the U.K.’s economy shrank to -0.2% more in the third quarter than economists forecast at -0.1%. Concerns about that the U.K.’s fiscal condition is deteriorating, helped the dollar get stronger. The Current account that came out -4.7B better than expected -8B could not support the sterling. Overall, GBP/USD traded with a low of 1.5920 and a high of 1.61. Today, the BBA Mortgage Approvals expected at 43K vs. 42.2K previously. Also, BOE MPC Meeting Minutes expected.
GBP/USD - Last: 1.597

Resistance 1.603 1.6075 1.6125
Support 1.5925 1.584 1.579

Japanese Yen (JPY) – The greenback rose to the most in eight weeks versus the yen as the yield on U.S. 10-year notes increased, boosting the advantage of holding Treasuries instead of Japanese debt to the largest in more than a year. Overall, USD/JPY traded with a low of 90.98 and a high of 91.86. Today, the USD/JPY might be quiet through holiday.
USD/JPY-Last: 91.70

Resistance 91.9 92.25 93.05
Support 91.4 91 90.75

Canadian Dollar (CAD) – The Canadian Dollar was again among the few currencies to rise against greenback. Canada’s dollar strengthened against its U.S. counterpart for a third day on speculation an accelerating economic recovery will prompt the central bank to raise interest rates sooner than it expected. Overall, USD/CAD traded with a low of 1.0540 and a high of 1.0634. Today, the GDP expected at 0.3% vs. 0.4% previously.
USD/CAD - Last: 1.0565

Resistance 1.0615 1.0635 1.067
Support 1.055 1.05 1.048

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