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Reports today showed unemployment in Japan rose in November meeting analyst’s forecasts, despite improvements witnessed in the manufacturing sector during the last period, while consumer prices decline in a slower pace. On the other hand, household spending rose more than expected.

We would like to wish you happy holidays from the entire trading team at FXDD. We will resume Forex commentary on Monday. Enjoy this time with your family and we will see you next week.

GBP/USD has been testing major support near 1.5920 for the past three days. A break below this level could send the pair down to the test the 38.2% retracement level at 1.5689. This is considered to be an area of high price activity and one that traders will place more significance on. Above the current price, is the 200 day MA (green line) at 1.6025 which will act as resistance.

Looking to the 1 hour chart for further clues, the GBP/USD can be seen testing support 3 times since Dec 21 2009, at the 1.5920 level. Below this as seen on the Daily chart is the major support level at 1.5689. There is a good chance that the market will push to this level for at least a test in the next few weeks.

As always be more cautious trading around holiday timeframes due to increased volatility.

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U.S. Durable Goods orders rise 2% for November excluding transportation, almost double against the forecasts of 1.1%. Adding in the transportation sector took the number down to 0.2% due to slumping personal aircraft sales, this was below estimates of 0.5%. Durable goods orders in October fell 0.6 percent, after a revised 2.2 percent rebound in September.

The number of Americans filing claims for unemployment benefits last week declined to the lowest level since September 2008. US initial jobless claims fall 28k last week to 452k. The prior number was 480k in the previous week. The four-week average continues to come down, now at 465,250 for a 2.7k decrease. Continuing claims also continue to come down, 127k lower in the December 12th 2009 week to 5.076 million.

USD/CAD nearing support at 1.0415 after failed move higher on December 18th 2009. The pair bounced off of the 100 day MA (blue line) at 1.0677. The USD/CAD has been in a short term trend to the downside since then and is now approaching the 1.0415 level. Below this, lows for 2009 come into focus at the 1.0205 area.

On the top side resistance will be found at the 1.0490 level, above that at 1.0530, 1.0677, and long term at 200 day MA (green line) at 1.1143. Traders will start to use caution as we go into the Christmas holidays today so we may encounter increased volatility.

Good Morning:

The USD lost ground overnight as speculation that the FED will keep their stimulus measures in place to act as a  driving force to revive the US economy.

World equity markets rose. Expectations that the global economic recovery is gaining traction has investors looking to continue the world wide equity rally.

Oil, Gold and commodities in general all rose.  Copper is this years metals leader with a 132% increase in 2009.

Oil:$76.35                                  Gold:$1102.20

HAVE A GREAT DAY-GOOD LUCK &  HAVE A MERRY CHRISTMAS

Ahead of the holidays, there is no change in the longer term bullish view in the $ as a major low is seen in place, and with at least a few months (and likely longer) of gains ahead. Nearer term however, the buck appears to be within a week or…