The dollar strengthened against the euro and the pound today, after the president of the World Bank said that 2009 remains a dangerous year, while he added that losses may increase this year and growth in 2010 is uncertain. This resulted in reducing the investor's risk appetite, making them sell the high yielding currencies and choose the low yielding ones as an alternative investment.
The euro dollar pair declined today after the investor's risk appetite decreased, pressuring the high yielding currencies. The pair recorded a high of 1.3992 and a low of 1.3950; still the 1.4000 level is representing a strong resistance that the pair can't break, especially with the absence of effective fundamentals in the U.S., the pair is having support at 1.3960, and if the pair managed to break the support level it will be targeting the 1.3900 level; while, the pair is having a resistance at 1.3985. According to the momentum indicators the pair is traded in an oversold area.
Regarding the pound dollar pair, it had declined for the second consecutive day, recording a high of 1.6295 and a low of 1.6245. The pair started to take a correctional trend after reaching the 1.6700 level by the end of June. The pair is having support at 1.6240, and if it moves below the support, the next target will be 1.6150, while the pair is having resistance at 1.6355. The general trend is to the downside, while momentum indicators on the daily charts indicate that the pair is trading in an oversold area. Industrial production reading in the U.K will be released today, and it may move the market.
Finally, the dollar yen pair still consolidating between 95.40 and 95.10; the pair recorded a high of 95.44, and a low of 95.09. The pair is expected to decline, since the statement of the president of the World Bank came in the favor of the yen as a low yielding currency, giving it a chance to gain against the dollar. However, the pair is having a resistance at 95.45 and a support at 95.15. If the pair moved further than the resistance level it will target 95.80, while momentum indicators are supporting the uptrend.