Sometimes one feels that the four seasons have passed just in one day, when mother nature wants to remind us how helpless we can be, well today, the market just wanted to prove a point and remind everyone that it is still full of surprises!
The sentiment was not that strong early in the day as Asian markets felt under the spell of Chinese reluctance to loosen its curbs on lending. That was followed by the move from Moody's Investor Service which decided to lower Portugal's credit rating by two steps sending the market further lower.
Nonetheless, the story did not end there, seemingly it only began. The market hit the lows and found the day's bottom to rise off lows once again. The market is upbeat today and focusing on the positive expectations for the earnings season, which provided a good start helping the market continue on the rise.
More news aided investors on easing their woes over the outlook, where Greece's successful bills auction fueled hope that the nation can withstand the crisis and avoid default as it sold the bill with lower yields that those it pays for the bailout. The U.S added to the data not with a widening trade deficit, but the rise on improving imports easing the fears over the recovery pace as demand is still reviving in the world's biggest economy.
The positivity overwhelmed the market and investors rushed into equities, higher yielding assets, commodities and shunned the dollar as the risk appetite extended.
The euro rebounded after reaching 1.2521, rushing to set the high so far at 1.2666 and still trading with strong positivity. We can see more gains for the euro especially as it breached 1.2615 resistance which increases the likelihood for the pair to breach 1.2660 and head higher toward 1.2695.
The bearish pressures on sterling ended and sterling soared. The pound managed to rise after it recorded the lowest at 1.4962 failing to remain below the marginal 1.50 areas recording the high so far at 1.5164. Currently the pair is trading among 1.5080 support and 1.5210 resistance with a clear bias for sterling.
The dollar was not salvaged at all, it even lost grounds against the yen despite the expectations otherwise. The USDJPY declined from 88.86 towards 88.17 and currently trading among the support at 88.00 and the resistance at 88.95 with the yen attaining the upper hand.