Friday, January 28, 2011

Forex Morning Review | Focus on US GDP data | 28 January 2011

Forex Morning Review | Focus on US GDP data | 28 January 2011

Coming up Today (All Times GMT)

* CHF - KOF Economic Barometer (10:30)
* USD - Advance GDP Q4 (13:30)


Thursday, preliminary figures showed that German consumer prices could increase by 1.9% annually in January, as a result of the rise in energy and commodity prices. This data echoed the recent change of tone among ECB members, which are carefully monitoring pressures on domestic and imported inflation. It also provided support for the euro above the $1.3700 level, while the dollar suffered from disappointing jobless claims and durable goods orders. Today, all eyes will be looking at the US fourth-quarter GDP, to see if strong numbers can invert the bearish trend of the greenback.

EURUSD Support / Resistance: 1.3680 / 1.3750


The week was challenging for the pound. The British currency retreated from $1.6000 to $1.5800 in reaction to the GDP contraction in the fourth quarter. Afterwards, it climbed back to $1.5900, in the light of hawkish MPC minutes. Overall, it seems that market participants have limited visibility on the ongoing austerity process. In the short term, this could limit upside potential for the pound, unless the UK economy shows clear signs that it can avoid a double-dip recession.

GBPUSD Support / Resistance: 1.5880 / 1.5985


Yesterday morning, the long-term sovereign rating of Japan was lowered from AA to AA- by Standard & Poor’s. In reaction, the USDJPY pair spiked to ¥83.00, reverting its bearish trend line. Overnight, Japanese data showed that employment was improving and deflation was easing. This could help the pair consolidate toward its support zone, eying ¥82.40 and ¥82.10 as targets.

USDJPY Support / Resistance: 82.10 - 82.40 / 83.00

January 28, 2011 -