Forex Market Update
This morning, the greenback is trading lower against most of the major currencies, ahead of the outcome of the Federal Reserve's policy meeting and US fourth quarter GDP data later in the trading day.
The Euro advanced against the US Dollar, surpassing the crucial 1.35 level, as risk appetite increased among investors, after disappointing US consumer confidence data stoked speculation that the US Federal Reserve would abstain from early withdrawal of monetary stimulus.
Sentiment on the single currency was further boosted, after data released this morning indicated that, economic confidence in the Euro-zone improved in January, while economic sentiment rose more-than-expected for the same month. Additionally, Italy saw borrowing costs fell at an auction of five-and ten-year government bonds.
Earlier, the ECB Governing Council member, Ewald Notwony assured that, the economic outlook for Europe is improving, though at a slower rates.
In the UK, net lending to individuals rose more-than-expected in December, hitting the highest level since April.
In a key development, Japanese Prime Minister Shinzo Abe shrugged off criticism that the nation was trying to intentionally weaken the Yen with its monetary and fiscal stimulus measures and countered that the measures taken by the government and its central bank are aimed at beating deflation and achieving sustainable economic growth.
Yesterday, the greenback traded higher in the New York session against the key currencies.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3538 against the USD, 0.36% higher from the New York close, rising above $1.35 for the first time since 2011, after the Euro-zone economic confidence rose more-than-estimated this month. Investors shrugged off data that indicated that Spain's economy contracted by 0.7% in the three months to December, bringing the annualized rate of contraction to a larger-than-forecasted 1.8%. Additionally, Italian business confidence unexpectedly fell to the lowest since October 2012. During the session, the pair traded at a high of 1.3546 and a low of 1.3482. Yesterday, the EUR traded 0.45% higher against the USD in the New York session, and closed at 1.3490.
The pair is expected to find its first support at 1.3453 and first resistance at 1.3585.
GBP USD
At 10:40 GMT, the GBP is trading at 1.5765 against the USD, marginally higher from the New York close, after a slew of positive economic data lifted sentiment on Sterling. UK mortgage approvals rose more-than-expected in December, while consumer credit rose to £0.6 billion in December, compared to £0.1 billion in November. Meanwhile, M4 money supply increased 0.7% in December, compared to a 0.2% contraction recorded in the previous month. During the session, the pair traded at a high of 1.5773 and a low of 1.5725. Yesterday, the British Pound traded 0.22% higher versus the Dollar in the New York session, and closed at 1.5762.
The pair is expected to find its first support at 1.5726 and first resistance at 1.5789.
USD JPY
The USD is trading at 91.31 against the JPY at 10:40 GMT this morning, 0.62% higher from the New York close. The Yen fell amid speculation that the Bank of Japan (BoJ) will pursue aggressive stimulus measures. In Japan, Prime Minister, Shinzo Abe, rejected global criticism that Japan's fiscal and monetary stimulus program were aimed at weakening the Yen, saying that the measures were aimed simply to combat deflation. During the session, the pair traded at a high of 91.43 and a low of 90.66. In the New York session yesterday, the USD traded 0.32% higher against the JPY, and closed at 90.75.
The pair is expected to find its first support at 90.62 and first resistance at 91.72.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9184 against the Swiss Franc, 0.34% lower from the New York close. On the economic front, UBS consumption indicator in Switzerland improved in December, while the KOF leading Index declined more-than-expected in January. During the session, the pair traded at a high of 0.9228 and a low of 0.9180. In the New York session yesterday, the USD traded 0.34% lower against the CHF, and closed at 0.9215.
The pair is expected to find its first support at 0.9158 and first resistance at 0.9231.
USD CAD
At 10:40 GMT, the USD is trading at 1.0027 against the CAD, 0.17% higher from the New York close. During the session, the pair traded at a high of 1.0029 and a low of 1.0008. Yesterday, the USD traded 0.50% lower against the CAD in the New York session, and closed at 1.0010.
The pair is expected to find its first support at 1.0000 and first resistance at 1.0061.
AUD USD
The AUD is trading at 1.0437 against the USD, at 10:40 GMT this morning, 0.33% lower from the New York close. During the session, the pair traded at a high of 1.0478 and a low of 1.0432. AUD traded 0.28% higher against the USD in the New York session, and closed at 1.0472.
The pair is expected to find its first support at 1.0420 and first resistance at 1.0467.
Gold
At 10:40 GMT, Gold is trading at $1666.07 per ounce, 0.15% higher from the New York close. This morning, Gold traded at a high of $1668.96 and a low of $1663.05 per ounce. In the New York session yesterday, the yellow metal traded marginally higher, and closed at $1663.55.
Gold has its first support at $1661.07 and first resistance at $1670.01.
Silver
Silver is trading at $31.43 per ounce, 0.09% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $31.50 and a low of $31.34 per ounce. Silver traded 1.19% higher against the USD in the New York session, and closed at $31.41.
Silver has its first support at $31.12 and first resistance at $31.63.
Crude Oil
At 10:40 GMT, Oil is trading at $97.79 per barrel, 0.50% higher from the New York close, ahead of a Federal Reserve policy statement that may signal the US central bank would take additional steps to stimulate the economy of the world's biggest crude user. Yesterday, the American Petroleum Institute (API) reported that the US crude stocks rose by 4.2 million barrels last week. This morning, Oil traded at a high of $97.87 and a low of $97.31. Yesterday, Oil traded 0.93% higher in the New York session, and closed at $97.35.
It has its first support at $96.76 and first resistance at $98.34.
Economic Snapshot
UK mortgage approvals rose in December
In the UK mortgage approvals for house purchases rose more-than-expected to 55,785 in December against the expectations for a rise to 54,500 and from 54,011 in November. Meanwhile, total lending to individuals increased £1.7 billion in December, compared to a £0.1 billion decline registered in the previous month.
UK M4 money supply fell at a slower pace in December
On an annual basis, M4 money supply in the UK declined 1.0% (YoY) in December, compared to a 2.8% drop recorded in the previous month. On a monthly basis, M4 money supply rose 0.7% in December, compared to a 0.2% drop in the previous month.
Euro-zone economic sentiment improved in January
Economic confidence in the Euro-zone advanced more-than expected to a reading 89.2 in January, from a revised reading of 87.8 in December and above the expected reading of 88.2. Meanwhile, industrial confidence rose to a reading of -13.9 in January, following a reading of -14.2 recorded in the last month. Moreover, services confidence rose to a reading of -8.8 in January, from a reading of -9.8 recorded in the previous month.
Switzerland's KOF leading indicator declined more-than-expected in January
The KOF economic barometer in Switzerland retreated to a reading of 1.05 in January, from revised reading of 1.29 in December. Analysts expected less decrease to 1.16.
Swiss UBS consumption index rose in December
In Switzerland, the consumption indicator rose to a reading of 1.34 in December, from 1.23 in November.
Spain's gross domestic product contracted in Q4 FY2012
Spain's gross domestic product (GDP) contracted 0.7% (QoQ) in the Q4 FY2012, steeper than the 0.3% fall registered in the Q3 FY2012. Annually, the GDP declined 1.8% in the Q4 FY2012, against the expected 1.7% decline and compared to a 1.6% fall recorded in the previous quarter.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities.
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