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UFXBank Forex News: Euro Rallies on Economic Optimism

Written by article default Monday, 17 January 2011 07:50

USD Dollar (USD) – The Dollar weakened against the other major currencies in Forex trading as Retail Sales came out worse than expected (0.6% vs. 0.8%), Consumer Sentiment fell unexpectedly last month (72.7 vs. 75.5), and other mix data came out which caused the Dollar to be less attractive than other, more risky, assets. The NASDAQ and Dow Jones strengthened by 0.73% and 0.47% respectively. Crude oil weakened by 0.2%, and closed at $91.18 a barrel. Gold (XAU) fell by 1.9%, closing at $1360.50 an ounce. No economic data is expected today due to Martin Luther king Jr. Day.

Euro (EUR) – The Euro continued to rally on Friday versus the dollar on optimism that the European finance ministers’ meeting this week will reinforce measures to help indebted nations. In addition, worse than expected data came out of the US, which also supported a stronger Euro. The momentum of the EUR/USD has been strongly bullish over the last few days, and as long as the rate is above 1.3300 levels, a long position is preferred. The next resistance on the daily chart is at 1.3450. Overall, EUR/USD traded with a low of 1.3314 and with a high of 1.3457. No economic data is expected today.

EUR/USD – Last: 1.3339

British Pound (GBP) – The Pound rose against the Dollar after the PPI data was released on Friday, which came out much better than expected (3.4% vs. 1.6% forecast), and pushed a stronger Pound. The main resistance line of the GBP/USD on the daily chart is 1.5910, and if the pair breaks above this level, the pound could rise to 1.6000 or even more. Overall, GBP/USD traded with a low of 1.5809 and with a high of 1.5889. No economic data is expected today.

GBP/USD - Last: 1.5847

Japanese Yen (JPY) –The Yen traded near a one week high against the Dollar on speculation that the U.S. economy isn’t recovering fast enough to spur the Federal Reserve to start raising interest rates. As long as the USD/JPY is trading above 82.00 levels, a long position is preferred. The next resistance on the one hour chart is located at 83.10. Overall, USD/JPY traded with a low of 82.41 and with a high of 83.06. No economic data is expected today.

USD/JPY-Last: 82.91

Canadian dollar (CAD) – The Canadian Dollar fluctuated against the Dollar on Friday, but weakened a bit in the end.  During the session, the Canadian dollar fell the most it has in eight days as new Chinese measures to tighten liquidity dampened demand for currencies tied to commodities. The USD/CAD fluctuated on Friday, and as long as the pair is below 1.0000 the Canadian Dollar is more attractive .Overall, USD/CAD traded with a low of 0.9886 and with a high of 0.9977. Today, Foreign Securities Purchases are expected to rise from 9.51B to 10.42B.

USD/CAD - Last: 0.9888