Yesterday the euro fell against the dollar and pound but rallied against the Swiss franc

Our team of forex experts analyse the currency markets and offer their insights on which market-moving events are likely to impact the performance of some of the most popularly traded forex pairs in the UK, including GBP/USD, EUR/USD and USD/JPY.

5th January 2011 – 8:00am

EUR/USD

Range: 1.3258 – 1.3325

Support: 1.3217

Resistance: 1.3440

Yesterday the euro fell against the dollar and pound but rallied against the Swiss franc. German unemployment rose for the first time since June 2009 whilst the initial Eurozone CPI reading hit an October 2008 high. EUR/USD has spent the last few trading hours in a relatively tight range between 1.3260 and 1.3300. The reasoning behind the euro’s fall from the 1.3400 area yesterday lies with strong US economic data combined with ‘expected’ Fed minutes.

GBP/USD

Range: 1.5540 – 1.5611

Support: 1.5530

Resistance: 1.5645

Tuesday saw the pound soar on better than expected manufacturing ISM data (16-year high), and despite some bearish corrective rallies, and testing highs of 1.5645, the pair managed to hold onto most of its gains into Tuesday evening. The pair is struggling to overcome the resistance at 1.5645 (Nov 4th high), whilst it’s supported by the December 30th low at 1.5365. The next piece of economic data out of the UK is not until tomorrow (PMI Dec).

USD/CHF

Range: 0.9470 – 0.9519

Support: 0.9370

Resistance: 0.9558

After being the best performing currency at the end of 2010, CHF finally gave up its push north yesterday. The rally was certainly getting exhausted for the CHF. After a few weeks of incessant gains, traders have opted to take a breather (perhaps booking some profits). USD/CHF found support at 0.9300, and has since rallied up nearly 200 pips. The CHF crosses (GBP/CHF and EUR/CHF) also saw severe upside corrections, both hitting weekly highs during yesterday’s session.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.