USD Dollar (USD) – The US Dollar finished mixed versus the majors, gaining versus the Yen and weakening versus the Pound and traded unchanged versus the Euro. The Dollar strengthened during part of the trading day as Greek bondholders failed to reach a settlement on the debt swap plan, which spurred demand for safety. Stocks ended mixed with the NASDAQ rising by 0.09% and the Dow Jones declining by -0.26%. Apple’s revenues which were reported after the end of the trading day beat estimates and could bring some positive momentum to tech stocks. Crude Oil declined by -0.44% closing at $99.14. Gold (XAU) declined by -0.80% closing at $1,664.90 an ounce. Today, Pending Home Sales are expected with -0.6% versus 7.3% previously. Crude Oil Inventories are expected with 0.9M versus -3.4M previously. All eyes will be on the FOMC Interest Rate Statement later in the day. The FOMC is expected to leave the rate unchanged at 0.25%.
Euro (EUR) – The Euro finished unchanged versus the Dollar after Greek bond talks broke down, although investors didn’t appear surprised or alarmed. The S&P threatened to declare Greece in technical default, which is a first for an EU member state since 1999, when the Euro was first introduced. Stock exchanges in Europe finished lower, the DAX30 declined by 0.27% and the CAC40 by -0.47%. The EUR/USD is currently considered bullish as long as it remains above the 1.2950 support level. The pair still faces many resistance levels around 1.31. Today, the German Ifo Business Climate is expected with 107.6 versus 107.2 previously. ECB President Draghi will speak at the World Economic Forum in Davos.
EUR/USD – Last: 1.3030
| Resistance | 1.3080 | 1.3110 | 1.3150 |
| Support | 1.3000 | 1.2950 | 1.2880 |
British Pound (GBP) – The British Pound gained versus the Dollar and most other majors after the Budget Gap narrowed more than forecast. Public Sector Net Borrowing came out better with 10.8B versus the 12.4B expected. The BOE governor, King, said that current lower inflation gives room for policy makers to increase bond purchases in order to aid the UK economy. The FTSE 100 declined by -0.53% to 5,751.90. The GBP/USD continues to be bullish as long as it is above the 1.5550 support level. The pair is facing strong resistance around the 1.57 and 1.5750 levels. Today, investors await the MPC Meeting Minutes release to assess the possibility of a wider QE program. The Prelim GDP is expected with -0.1% versus 0.6% previously. BBA Mortgage approvals are expected with 35.3K versus 34.7K previously.
GBP/USD – Last: 1.5620
| Resistance | 1.5650 | 1.5700 | 1.5750 |
| Support | 1.5575 | 1.5525 | 1.5500 |
Japanese Yen (JPY) – The Yen finished lower versus all 16 majors after the BOJ cut its economic growth forecast for next year. Helping the weakness of the Yen were better than expected Services and Manufacturing economic releases in the EU and a smaller than expected budget deficit in the UK, which lowered demand for the safe haven of the Yen. Technically, the USD/JPY broke above the trading channel it had between the 76.60 and 77.30 levels. The pair faces a strong resistance level at 78.20. No major economic data is expected today.
USD/JPY – Last: 77.60
| Resistance | 78.00 | 78.20 | 78.50 |
| Support | 77.30 | 77.00 | 76.60 |
Canadian Dollar (CAD) – The Canadian Dollar weakened versus the US Dollar after retail sales showed a slowing in growth and Crude Oil prices declined. The USD/CAD is on a downtrend with a strong support level around 1.0075. Today, the BOC governor Carney will speak at the world economic forum, in Davos.
USD/CAD – Last: 1.0095
| Resistance | 1.0140 | 1.0170 | 1.0200 |
| Support | 1.0070 | 1.0050 | 1.0000 |
