Despite that currencies seem to be trading calmly today and yesterday, yet seemingly the idea is that they are incapable of standing up for the dollar; we can see that the euro and sterling, as is the case for other currencies, are trading within very tight ranges within the lower range against the dollar. Assessing closely, the euro and sterling are both trading in oversold areas while signs of optimism and stability are returning to the market which might fuel higher yield seekers to take advantage and dump the dollar aside.
Sterling traded against the dollar today among 1.6258 and 1.6337 with a clear upside bias, despite the low trading volume and the tight trading range.
As for the euro, it also is trading tightly among 1.4707 and 1.4773, and despite the tight range, we can see that trading is biased to the upside as the pair is influenced by a bullish pattern over hourly basis and trading above 1.4700 will keep the upside move valid for today. The pair has strong resistance ahead at 1.4815 which might restrict the upside potential for the pair, yet by breaching it the pair might extend the rise toward 1.4860.
Trichet's assurances that Greece will not face bankruptcy increased confidence back in European markets, especially after the EU summit showed that leaders agreed to keep the measures to stimulate the economy. The German DAX is trading now higher by 1.11% as of 10:38 GMT while CAC 40 is trading higher by 1.73%.
Meanwhile, the Japanese yen's trading attracts all the attention, we can see that the dollar was capable of acquiring gains versus the yen today, where the yen suffered strong selling in the Asian session as stocks rose, which increase the dollar's strength versus the yen despite the bearish correctional wave that dominates it across the market.
The USDJPY is trading among 88.17 and 88.98 and seemingly the pair is biased to the upside due to the selling pressures on the yen, and as we await important US data from retail sales to confidence, we still see the possibility for the pair to fluctuate further.