Taheri Exchange Daily FX Report
Issue: # 171          www.taheriexchange.com   4th of January 2011

 

 

Technical Ranges 
CAD, USD, EUR, GBP & JPY
technical charts

USD/CAD

Support:  0.9887        Resistance: 0.9998

CAD/JPY

Support:  83.51        Resistance:  82.06

EUR/CAD

Support:  1.3249     Resistance:  1.3371

EUR/USD

Support:  1.3322     Resistance:  1.3470

GBP/USD

Support:  1.5532     Resistance:  1.5677

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Currency Commentary

EUR, USD, CAD, GBP , JPY


EUR:    The EUR/USD has most recently broken past resistance around the 1.3400 barrier, gaining more than 40 pips to consolidate to the upside of the area. The pair has peaked at a fresh high of 1.3435 before settling slightly underneath at time of writing yet is still in range directly ahead of the NY session.

USD:    Today markets awaiting for the beginning of 2011, Mr. Bernanke's comments from the FOMC minutes meeting..scheduled for after 2pm this afternoon. Factory orders data is due @ 10am this morning, if positive...we will see the continual bearish trend.

CAD:   Once again today, oil, commodities and equities are performing positively. Will the "parity" trend continue till the end of this week?

The USD/CAD was unable to reach the 0.9822 range as stated in yesterday's report..currently the pair is hovering in the mid 0.9900 range.

Today's range for the USD/CAD...possible higher 0.9800 to higher 0.9900 levels.

GBP:   The Pound has rallied across the board on Tuesday, fuelled by soaring FTSE Index and upbeat UK manufacturing data, pushing the pair's recovery from 1.5435/45 low yesterday to 1.5650 high, just 15 pips shy of 1.5665 high on Dec 31.


JPY:    The Yen is being one of the weakest currencies at the opening of the 2011 year, as the Japanese currency, traditional safe haven asset is sold across the board amid positive stock markets and improved economic outlook.

USD/JPY decline from 84.40/50 resistance area, tested on mid-December, found support at 80.90, and the pair has trimmed losses reaching the downtrend resistance line from mid-December highs, currently at 82.20/30.


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worldfx

" Loonie could reach $1.05usd in 2011?? "....

" We are beginning 2011 with a notably strong CAD".....


This could well be the year of the loonie.

While the Canadian dollar may not rack up the hefty gains of, say, 2009, when it climbed 16 per cent, it is expected to still remain strong throughout the year.

Yesterday, Goldman Sachs Group Inc. projected the loonie will trade at about $1.05 U.S. That's close to the $1.04 predicted by Scotia Capital, where currency strategist Camilla Sutton projects a strong year for commodity-linked currencies in general.

"We are beginning 2011 with a notably strong [Canadian dollar]," Ms. Sutton said. "Risks stemming from Europe and the global recovery remain a key threat; however the combination of loose U.S. monetary policy, a global search for yield and diversification combined with a generally weak [U.S. dollar] should help to support [the Canadian dollar] through parity."

The loonie continued today to trade today above parity. Ms. Sutton noted that the currency's strength to date has been largely driven by a weaker U.S. dollar and higher commodity prices. While the difference between interest rates in Canada and the United States hasn't yet been a factor, she added, it will become one later in the year.

The strength in the dollar is a concern for the Bank of Canada, and comes amid a so-called currency cold war that has seen other countries manipulate their money to hold down values, in turn keeping down prices of their exports.

The loonie's strength, added Scotia Capital economists Derek Holt and Gorica Djeric, will stop the Bank of Canada from raising its benchmark rate again until October.

 

"Equity and commodity markets on a rise this morning..."..

"Looking ahead to the U.S. open, we are forecasting a gently positive start ".....

bulls-bears 

Just about everything is up this morning. Stocks continue to rally, oil is at its highest in more than two years, and copper hit a fresh high.

China’s benchmark Shanghai composite climbed 1.6 per cent after yesterday’s holiday, while Japan’s Nikkei 225 gained 1.7 per cent, also after a holiday. In Europe, London’s FTSE 100 was up by about 1.9 per cent by about 5:30 a.m. ET, rushing out of the gate and catching up to the gains made on other exchanges that traded yesterday.

Dow Jones industrial average and S&P 500 futures also pointed to further gains when New York markets open, driven by continued optimism over the outlook for the recovery. Investors are awaiting other data bits today, including a report on manufacturing orders in the U.S., though that’s a November reading, the December sales showing by North American auto makers, and the minutes of the last meeting of the Federal Reserve.

“Looking ahead to the U.S. open, we are forecasting a gently positive start, with the Dow expected to open up around 10 points higher than last night's close,” said David Jones, chief market strategist at IG Index.

“There is plenty to focus on with the Fed minutes due out later today, but with Monday once again seeing fresh two-year-plus highs for the Dow, it would take quite a shock from these to knock the bullish sentiment back.”


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Main USD/CAD data today:

1. USD- Factory orders & FOMC minutes meeting data.
CAD - No relevant data.

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