US Dollar (USD)

The Dollar rallied against its major counterparties after the jobless claims in the US fell more than economists predicted (550K), a sign some employers have stopped paring staff as the recession eases. President Obama added to the optimistic atmosphere by saying in his speech that the recession keeps showing signs of deceleration. After a 4 day rally, Wall Street closed down. NASDAQ and Dow Jones fell by 1.00% and 0.27% respectively. Crude oil closed almost unchanged dropping by a mildly 3 cents at 71.9$ a barrel as the Dollar strengthened across the board. Gold (XAU) also closed unchanged a volatile trading session, closing at 963$ an ounce. Today, Nonfarm Payrolls are expected at -330K vs. -467K previously. A positive surprise in the U.S. payroll report may boost the Dollar by increasing speculation the Federal Reserve will tighten monetary policy early next year. Also today, the unemployment rate is expected at 9.6% vs. 9.5% previously,

EURO (EUR)

The Euro dropped against the Dollar and skyrocketed against the Pound after the ECB left the rate unchanged at 1%. European Central Bank President Jean Claude Trichet said higher unemployment might damp an economic recovery in the 16-nation euro region. Overall, EUR/USD traded with a low of 1.4328 and with a high of 1.4430. Today, German Industrial Production (The German Industrial Production measures the change in the total outputs of the German factories, mines, and utilities) expected at 0.6% vs. 3.7% previously.

EUR/USD - Last:Â 1.4360

Resistance

1.4400

1.4450

1.4525

Support

1.4320

1.4280

1.4225

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British Pound (GBP)

The Pound fell from near the highest level against the Dollar since October and dropped massively versus the Euro after the Bank of England increased its asset-purchase plan on concern the recession is deeper than previously anticipated. BOE also left the rate unchanged at its current level of 0.5%. All in all GBP/USD traded with a low of 1.6381 and with a high of 1.7029. EUR/GBP traded with a 0.8455 and a high of 0.8567. Today, PPI Input which is an inflationary indicator that measures the average change in prices purchased by manufacturers of goods and services, is expected at -0.8% vs. 1.5% previously. –The Pound fell from near the highest level against the Dollar since October and dropped massively versus the Euro after the Bank of England increased its asset-purchase plan on concern the recession is deeper than previously anticipated. BOE also left the rate unchanged at its current level of 0.5%. All in all GBP/USD traded with a low of 1.6381 and with a high of 1.7029. EUR/GBP traded with a 0.8455 and a high of 0.8567. Today, PPI Input which is an inflationary indicator that measures the average change in prices purchased by manufacturers of goods and services, is expected at -0.8% vs. 1.5% previously.

GBP/USD - Last: 1.6785

Resistance

1.6820

1.6900

1.6955

Support

1.6685

1.6575

1.6525

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Japanese Yen (JPY)

The Yen declined versus the Dollar trading with a low of 94.76 and with a high of 95.8. Japan’s broadest indicator of economic health rose at the fastest pace in 29 years, signaling the nation’s deepest postwar recession is easing. Japan’s economy grew at an annual 3.8% pace last quarter from a record 14.2% contraction in the first three months.

USD/JPY - Last: 95.40

Resistance

95.60

95.80

96.10

Support

95.00

94.70

94.40

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Canadian dollar (CAD)

The Canadian Dollar weakened as stocks declined and the Payroll report due today in the US is forecast to show U.S. payrolls shed fewer jobs in July while more positions were cut in Canada. Overall USD/CAD traded with a low of 1.0675 and with a high of 1.0797.Today, Employment Change is expected at -20K vs. -7.4K previously and Ivey PMI (The Ivey Purchasing Managers Index (PMI) measures the activity level of purchasing managers in Canada) is expected at 55.5 vs. 58.2 previously.

CAD/USD - Last: 1.0765

Resistance

1.0815

1.0855

1.0880

Support

1.0680

1.0640

1.0610

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