Currencies trade in overbought area

By IBTimes Staff Reporter | March 10 2010 9:18 AM

The dollar resumes its climb as major currencies clear the way, therefore boosting the federal currency, from the mixed data in the markets. Investors are avoiding higher-yielding assets as the outlook for major economies remains threatened, especially by the swelling budget deficit in Europe. The Dollar Index, which measures strength of the dollar versus six major currencies, is currently traded at 80.59 while recording a high of 80.85 and a low of 80.51.

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Today, from the euro zone we see that the biggest nation in the 16-nation region, Germany, released its trade balance showing that exports unexpectedly plunged and this data hurt the euro after the release, yet all the euro zone itself did not release economic data. The technical charts reveal that on the one-hour chart, the pair is consolidating between the support of 1.3525 and the resistance of 1.3655 at 1.3608, while recording a high of 1.3625 and a low of 1.3543. The charts also show that the pair is being traded close to an overbought area while there is low volume in the markets.

The pound extends its decline in the markets as a result of the pessimism that is spread in the United Kingdom, while ahead of the governmental elections as there are high concerns regarding if the new government will be able to narrow the budget deficit or not. The GBP/USD is being traded at 1.4942 between the support of 1.4900 and the resistance of 1.4990 while recording a high of 1.5014 and a low of 1.4871. The general trend for today is bearish as a result of the concerns in the nation, which causes investors to sell the pound.

The yen depreciates in the markets heavily after exports in China climbed therefore caused investors to sell lower-yielding assets and increased demand on higher-yielding assets which weighed on the strength of the yen. The USD/JPY is currently traded at 90.47 above the support of 90.15 and below the resistance of 91.40. The pair so far records a high of 90.50 and a low of 89.88. The one-hour charts show an upside trend as the pair trades in an overbought area.