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UFXBank Forex News: Yen Strengthens After Large Aftershock

Written by article default Tuesday, 12 April 2011 06:39

USD Dollar (USD) – The Dollar strengthened against most of the major currencies after days of weakness in Forex trading. Today, Fed Vice Chairman Yellen said, “increases in commodities will have only a temporary effect on inflation and don’t warrant a reversal of stimulus.” The U.S. economy doesn’t seem to be experiencing the kind of “sharp rebound” that usually follows a deep recession. In addition, her remarks show how top Fed officials, including Bernanke, are reluctant to follow the lead of their counterparts at the European Central Bank, who are tightening credit in an effort to combat inflation. It could be taken as a sign for change in the market trend of a stronger US Dollar. The NASDAQ weakened by 0.32% and the Dow Jones gained 0.01%. Crude oil fell by -3.00% due to a cut of its growth forecasts for the U.S. and Japan by the International Monetary Fund and it closed at $108.30 a barrel. Gold (XAU), posting fresh all-time highs today above $1470, closed at $1456 per ounce, while investors paused for a breath and awaited fresh market cues. Today, the Trade Balance is expected to rise to -44.1B vs -46.3B previously.

Euro (EUR) – The Euro declined against the Dollar after being unable to hold above 1.4450. The pair is finding support barely above daily lows that lie at 1.4400. The downside target level for a pullback resides around the previous 1.4280. But, if it will again break its resistance at 1.4450, the trend will be bullish. Overall, EUR/USD traded with a low of 1.4242 and with a high of 1.4486. Today, German ZEW Economic Sentiment is expected at 11.7 vs 14.1 previously.

EUR/USD – Last: 1.4390

British Pound (GBP) – The Pound fell against the Green back after it peaked earlier at 1.6425 but lost strength and pulled back below 1.6400. BRC Retail Sales came out and showed less than expected sales and investors looking to reduce investments in higher yielding assets didn't support the pound.  The release of today’s CPI will likely determine the trend for the GBP. If the CPI will show growth of 4.4% in prices, the trend will probably be bullish. The GBP/USD‘s resistance is still at 1.6400, and if the pair breaks this level, it could reach new highs. Overall, GBP/USD traded with a low of 1.6262 and with a high of 1.6427.

GBP/USD - Last: 1.6297

Japanese Yen (JPY) –The Yen strengthened against the US Dollar amid renewed demand for refuge assets after an earthquake shook buildings in Tokyo, a month after a record temblor triggered a nuclear crisis in Japan. The trend is bearish and the next support level of the USD/JPY on the daily chart is located at 83.50, if the pair breaks below this level, the pair could decline to 83.00 and even less. Overall, USD/JPY traded with a low of 83.90 and with a high of 85.48. Monetary Policy Meeting Minutes are expected to be published.

USD/JPY-Last: 83.52

Canadian dollar (CAD) – The Canadian Dollar declined against the US Dollar after oil fell by -2.54%. Today, the Overnight Rate is expected to come out unchanged at 1.00%. As long as USD/CAD is trading below 0.9700, the Canadian Dollar is more attractive and the momentum is very bearish for the US Dollar. The next support level on the four hour chart is located at 0.9430. Overall, USD/CAD traded with a low of 0.9526 and with a high of 0.9624. No major news is expected to be released today.

USD/CAD - Last: 0.9620