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UFXBank Forex News: Euro Drops as Confidence Grows in USD

Written by article default Monday, 14 February 2011 07:01

USD Dollar (USD) – The Dollar strengthened against most of the other major currencies after the Federal Reserve said that an increase in Treasury yields indicates growing confidence that the U.S. recovery will gain strength. In addition to this news, the trade balance came out at -40.60B, better than the expected -40.70B. The NASDAQ strengthened by 0.68% and the Dow Jones rose by 0.36%. Crude oil fell by 1.3% and closed at $85.58 per barrel. Gold (XAU) weakened by 0.2% and closed at $1359 an ounce. Today, no economic data is expected.

Euro (EUR) – The Euro extended its losses in Forex trading, touching to a two day low against the Dollar, on speculation that Portugal may tap Europe’s bailout fund. Further weakening came as good economic data was released from the U.S. last Friday. The EUR/USD is facing a support level of 1.3500 and the next level comes at 1.3460. According to the four hour chart, in the case that it breaks below this level, the pair will fall to 1.3360. Overall, EUR/USD traded with a low of 1.3497 and with a high of 1.3621. Today, industrial production is expected at -0.2% vs. 1.4% previously.

EUR/USD – Last: 1.3536

British Pound (GBP) – The pound weakened against the dollar on concern that this year’s gains were overdone after the Bank of England left interest rates at a record low yesterday, which is dimming speculations that rates may rise later in the year. The GBP/USD‘s support is at 1.6000 on the daily chart, if the pair breaks below this level again today, the pair will have a greater chance to decline to 1.5900. Overall, GBP/USD traded with a low of 1.5963 and with a high of 1.6113. Today, no major economic data is expected.

GBP/USD - Last: 1.6065

Japanese Yen (JPY) –The Yen fell against the greenback last Friday, but with the opening of the Asian markets tonight the Yen may start rising against the Dollar and the other majors, especially after publishing the GDP, which came out at -0.30%, better than the expected -0.50%. Now, after the USD/JPY had broken the resistance level of 83.00 last Friday, this level has become it’s his support. Overall, USD/JPY traded with a low of 82.24 and with a high of 83.67. No economic data is expected today.

USD/JPY-Last: 83.23

Canadian dollar (CAD) – The Canadian Dollar rose against most of its major counterparts as an unexpected trade surplus in December encouraged speculation that the Bank of Canada will raise borrowing costs sooner than other central banks. The trade balance came out at 3.00B, better than the expected -0.40B. The USD/CAD’s support level is located at 0.9840 and as long as the rate is below 1.0000, the Canadian Dollar is still more attractive. The next resistance level on the four hour chart is located at 0.9920.Overall, USD/CAD traded with a low of 0.9862 and with a high of 0.9986. Today, no major economic data is expected.

USD/CAD - Last: 0.9956