KEY DAY IN MAJOR PAIRS

Finished the first month of the year falls in different markets with the dollar appreciation and yen in the foreign exchange market.

The Dow ended the month of January with losses of 3.5%, despite the known GDP data with a preview of the U.S. economy stronger than expected with 5.7% in the last quarter of 2009 (best showing since the third quarter of 2003).

Among commodities, oil’s fall highlighted in the past month with a cumulative decline of 8.15% with a closing price of $ 72.89 on the New York Mercantile Exchange (Nymex).

Earlier in the day, the Nikkei closed Friday’s session with a sharp drop of 2.08%, closing the session at 10,198.04, following the general market trend. However, China’s industrial production showed an increase in the month of December of 2.2% over the previous month by completing the tenth consecutive monthly rise.

From the Euro Zone were known retail inflation data in the foreground with figures higher than the previous month by a tenth in 1.00% (but lower than estimated by analysts at 1.2%), and with a further increase in unemployment during the last month of 2009, leaving the same at 10% is the worst figure since August 1998 as released by the statistical office.

In the beginning of this new month of February we look to the major centers of European stock (DAX, CAC, FTSE) listing plans known after the bloc’s manufacturing PMI with a rise above the estimated 52.4. The number indicates the fourth consecutive month above 50 points threshold that divides expansion from contraction in activity.

Euro – Dollar

The European currency fell sharply in the first month this year for a minimum daily during the last session in the congestion zone of 1.3860 following the American currency strength.

As we start this new week (and month of February), we see the pair in a corrective movement in upward direction at 1.3915, after 1.3853 soil form a minimum surpassing the previous month.

We hope today in a continuation of the recovery of the Euro since the current value. The first level of resistance will find in the 1.3935 area where we found 23.6% of the decline of the rally between 1.4194 and 1.3853 bassist, then 1.3965, 1.3990, and 1.4020 are the following levels to consider.

The supports instead the find in 1.3885, 1.3850, 1.3820, and 1.3785.

Dollar – Franco

The Swiss currency closed the month of January with a sharp fall against the dollar with a minimum (maximum graphics) in the 1.0643 area, price level, which reached the last day of strong motion confirming the trend.

Monday envision a movement of profit-taking correction with the pair trading at 1.0580 at the moment. The next area to consider support from the current value will be 1.0535, 1.0505 and 1.0490 then the following objectives will be bearish.

The resistors instead find in the 1.0595, 1.0620, 1.0645, and 1.0680.

Pound – Dollar:

The Pound Sterling was no stranger to the strong dollar accumulating more than 300 points of defeat in the last two days of the month, and ending at 1.5980 where it formed the floor Friday.

Monday we see the pair begin the week with a “gap” of about 35 points home, which has already been covered. The trend is down, and found as the level of turning to a probable larger movement area 1.5793 (see Graphic). If it is confirmed the rupture of that price level will continue as next targets 1.5735, 1.5680. Before first must negotiate as 1.5850 support today.

Resistance since the current value at 1.5955, 1.6000, 1.6080, and 1.6735.

Dollar – Yen:

With a similar pattern to the times where uncertainty prevails, the yen resumed its upward trend in the first month of the year with a maximum (minimum in graphics) which formed 89.08 monthly soil from which rebounded to close on Friday 90.23 bearish.

In this we see the pair on Monday listed on the closed area the previous week, falling during the last hours awaiting the opening of the U.S. trading session.

The pair shows a slight upward trend for today, with the first level of resistance to drill in 90.50, then 90.80, 91.05 and 91.35.

The brackets will be 90.10, 89.80, 89.55 and 89.30.

KEY DAY IN MAJOR PAIRS

Facundo Molina is founder and director of MolFX - Management, a company fully specialized in Foreign Exchange Markets, with an important client portfolio through Capital Markets Services LLC (CMS). He has a BA Business Management at the Universidad Nacional del Sur (Argentina), where he has a doctorate degree based on the application of Fibonacci theory into financial markets. He also acts as professor of new and experiments traders.