FX News – January 7 2014: USD Ends Monday on a Weak Note

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The greenback ended Monday's trading session weaker after the release of a lower-than-expected ISM Non-Manufacturing Data. Analysts' expectations were for it to jump from the previous 53.9 to 54.6. Instead, it slid down to 53.0.

The decline was enough to drag down the USD against major currencies such as the EUR, GBP, and the JPY.

The EUR/USD pair began Monday's session on a low note but eventually gained ground towards the end of the day. After opening the Asian session at 1.3593, it slid progressively until it hit a 1-month low of 1.3570. But with the recovery, the pair managed to reach session highs around the 1.3650 level. The EUR/USD pair is currently trading at 1.3629, with initial resistance seen at 1.3628, followed by 1.3662. Meanwhile, initial support is at 1.3538, followed by 1.3504.

The GBP/USD pair also had a similar story on Monday as the EUR/USD. It also opened on a weak note during yesterday's session, and sank to a low of 1.6337 around the middle of the trading day. It eventually climbed back up again, peaking at around the 1.6430 area, before settling within the 1.6406-1.6408 range at the moment.

The pair is currently trading at 1.6408, with initial resistance seen at 1.6440, followed by 1.6481. Meanwhile, initial support is at 1.6359, followed by 1.6318.

In the case of the USD/JPY, the pair opened yesterday's session on a strong note at around the 104.85 zone. At the end of the day, however, it dropped to just above 103.90 due to the weaker greenback. The pair was able to move back to the 104.00 area, and is currently trading at 104.19. Initial resistance for the USD/JPY is at 105.23, followed by 105.50. Meanwhile, initial support is at 104.42, followed by 104.16.

Despite the short-term setback, the greenback is largely expected to strengthen further in the coming months. But before that, the US employment data and NFP figures will influence the USD's value greatly later this week.

By FX Strategy Team, Published on 6th of January 2014
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