Euro Declines Versus the Dollar
UFXBank Research from UFX Bank at 12/30/09
Daily Review 30/12/2009
USD Dollar (USD) – The Dollar gained against most majors on speculations the stimulus plan will end sooner than expected due to better economic conditions. Consumer Confidence gained in December for a second month but came out slightly weaker with 52.9 versus 53 expected. NASDAQ and Dow Jones remained almost unchanged with -0.12% and -0.02% respectively, Crude Oil gained by 0.1% closing at 78.87$ a barrel, Gold (XAU) weakened by -0.9% closing at 1098$ an ounce. Today, Chicago PMI is expected at 55.2 vs. 53 prior.
EURO (EUR) – The Euro declined versus the Dollar as speculations rose that more countries in the Euro region will get their credit rating downgraded. German consumer prices posted their highest annual gain in 8 months in December gaining by 0.7% vs. 0.6% forecast. Overall, EUR/USD traded with a low of 1.4331 and with a high of 1.4458. The EUR/USD is continuing its downtrend and a break below the 1.43 level will confirm the reversal. Today, M3 Money Supply is expected at 0.4% vs. 0.3% prior.
EUR/USD - Last: 1.4318
Resistance 1.4366 1.4418 1.4458
Support 1.4305 1.4230
British Pound (GBP) –The pound weakened versus the dollar trading with a low of 1.5867 and with a high of 1.6067, Housing Equity Withdrawal came out better than expected at -4.9B vs. -6.3B forecast. The Pound was very volatile during the trading session as a result of light volume due to the upcoming holidays. The Pound is getting oversold but the downside momentum is still strong. The next major support level is around 1.57. No economic data expected today.
GBP/USD - Last: 1.5891
Resistance 1.5926 1.6012 1.6067
Support 1.5867
Japanese Yen (JPY) –The Yen weakened to a 2 month low against the Dollar over speculations the Federal Reserve will proceed in withdrawing stimulus measures. Overall, USD/JPY traded with a low of 91.52 and with a high of 92.07. The USD/JPY has finally broken above its week long consolidation and if it remains above 92 it is likely to continue with its bullish momentum. Japanese banks will be on holiday until next week and light volume with volatility is expected.
USD/JPY-Last: 92.18
Resistance 92.26
Support 91.85 91.40 91.10
Canadian dollar (CAD) – The Canadian Dollar was unchanged versus the Dollar after weakening from fresh monthly highs. Overall, USD/CAD traded with a low of 1.0366 and with a high of 1.0444. USD/CAD has made a hammer reversal candle on the daily chart and the reversal is likely to continue and push the pair higher. No economic data expected today.
USD/CAD - Last: 1.0488
Resistance 1.0507 1.0585 1.0633
Support 1.0447 1.0418 1.0366
