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USD Reaches 3 Month High

UFXBank Research from UFX Bank at 01/06/10


Daily Review 06/01/2010

USD Dollar (USD) – The Dollar strengthened versus most majors after Pending Home Sales fell more than forecast in November, dropping by 16% after a revised 3.7% in October. Factory orders in US rose in November to 1.1%, more than twice as much as anticipated, but this did not help stop the Dollar’s decrease. NASDAQ remained almost at -0.07% unchanged and Dow Jones declined by 0.11%. Crude oil continue to increase for the ninth day in a row, rising by 0.3% and closing at 81.77$ a barrel. Gold (XAU) also rose, closing at 1118.7$ an ounce. Today, ADP Non-Farm Employment Change is expected to decline from -169K to -74K and ISM Non-Manufacturing PMI is expected at 50.5 vs. 48.7 prior. The FOMC Meeting Minutes will be released today as well.

EURO (EUR) – The Euro declined versus the Dollar after Pending Sales of Existing Homes in US Fell by 16% and risk appetite remained low. German Unemployment change came out better than expect at -3K vs. 6K forecast. As long as the EUR/USD stays below 1.4380 a short position is preferred. Overall, EUR/USD traded with a low of 1.4346 and with a high of 1.4483. Today, Industrial New Orders is expected at -1.0% vs. 1.7% prior.
EUR/USD – Last: 1.4360

Resistance 1.4458 1.4483
Support 1.4334 1.4273

British Pound (GBP) –The British Pound fell for the second day in a row against the Dollar and the Euro as investors bet the Bank of England may continue with its asset-purchase plan to lower borrowing costs. In one hour chart we can see clearly lower higher and lower so a short position is preferred. If the pair will go above 1.6100 we can say that the trend has changed. Overall, GBP/USD traded with a low of 1.5965 and with a high of 1.6154. Today, Service PMI is expected at 56.7.
GBP/USD - Last: 1.5980

Resistance 1.6087 1.6154 1.6235
Support 1.5945 1.5833

Japanese Yen (JPY) –The Dollar decreased the most against the Yen in four weeks, dropping to a low of 91.25 after the disappointing Home Sales data in the US. The pair made a reversal on the daily graph therefore a correction is expected to continue. Overall, USD/JPY traded with a low of 91.25 and with a high of 92.52.
USD/JPY-Last: 91.95

Resistance 92.16 92.76 93.14
Support 91.52 91.25

Canadian dollar (CAD) – The Canadian Dollar advanced to the strongest level against the Dollar since October as crude oil, the nation’s biggest export, touched a 14-month high, but reversed and dropped after US data was released. Canadian factory prices and raw- material costs both rose twice as fast as economists predicted in November. The industrial product price index advanced by 1%, the fastest since June 2008. As long the pair stays under 1.4000 a short position more reasonable .Overall, USD/CAD traded with a low of 1.0336 and with a high of 1.0411.
USD/CAD - Last: 1.0375

Resistance 1.0408 1.0424 1.0560
Support 1.0350

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