Tuesday’s Forex Trading Outlook

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Daily Recommendation

GBP/USD is currently on its way to the 1.63 level, in accordance with the Dollar weakness versus the other majors. 1.63 level is the first Fibonacci retracement of the downside movement that started on the 17th of September and created a bottom yesterday. Our recommendation is to look for Short positions close to the 1.63 level. We offer to take several short-time positions and also try to join the main downside trend in the GBP/USD. The next Fibonacci retracement level is 50% at 1.6350.

USD Dollar (USD) -

After gaining versus the majors during the European trade session the Dollar weakened as U.S markets moved toward closing the downside gap. CB Leading Index came out worse than expected at 0.6% versus 0.8% but still managed to show a fifth consecutive month of gains. Speculations the G20 summit will call for reducing global trade imbalances by calling for gains in other currencies caused the Dollar to weaken versus 14 out of the 16 majors. Wall Street extended the falls in stocks worldwide. Dow Jones lost 0.42% and the S&P500 fell 0.34%. NASDAQ managed to end with a moderate gain. Crude-oil fell 3% and closed at $69.5 a barrel. Gold (XAU) also declined but managed to finish above $1000 at 1003$ an ounce. Today, The House Price Index (HPI) is expected unchanged at 0.5%.

EURO (EUR) -

The Dollar rose against the Euro for a second day on bets its 2 percent sell-off since the end of August is too fast to sustain. The Euro jumped during the American session against the Dollar, rising more than 60 pips, to 1.47. From there EUR/USD started pulling back and found support at 1.4670.Overall, EUR/USD traded with a low of 1.4610 and with a high of 1.4716. Today, The Italian unemployment rate is expected at 7.7% vs. 7.3% previously.

EUR/USD – Last: 1.4685

British Pound (GBP) -

The Pound fell for a third day against the Dollar as U.K. stocks dropped for the first time in seven days, sapping demand for the Dollar. The British currency also weakened to a five-month low versus the Euro as UK\’s deteriorating fiscal health continues to concern investors. Overall, GBP/USD traded with a low of 1.6133 and with a high of 1.6265. No economic data expected in the Pound today.

GBP/USD – Last: 1.6220

Japanese Yen (JPY) -

The Dollar traded near a one week high against the Yen before a Federal Reserve meeting at which policy makers may signal an exit from the economic stimulus measures, increasing the appeal of U.S. assets. The Yen dropped against all but three of its 16 most-traded counterparts. Overall, USD/JPY traded with a low of 91.26 and with a high of 92.51. Today is Autumnal Equinox Day in Japan, banks will be closed and no economic data will be released.

USD/JPY-Last: 92

Canadian dollar (CAD) -

Canada’s Dollar weakened for a second consecutive day as Crude and Gold prices fell and global stocks declined, making high yield currencies such as the Canadian Dollar less appealing. The drop in equities encouraged some investors to sell the Canadian Dollar to limit losses. Overall, USD/CAD traded with a low of 1.0673 and with a high of 1.0851. Today, The Core Retail Sales are expected at 0.1% vs. 1% previously and The Retail Sales are expected at 0.5% vs. 1% prior.

USD/CAD – Last: 1.0775

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