The green currency rebounded against a basket of major after last week losses ahead of the Fed meeting tomorrow. The dollar index, which tracks the dollar movements against six major currencies, climbed to 80.62 after receiving support at 80.09.
Yet, the dollar remains under pressure and expectations that it will continue its drop are ongoing after a wave of concerning data released recently, especially Friday's non-farm payrolls which showed a drop of 131,000 in July from 71,000 in June.
The fraught outlook is increasing speculations the Fed would keep interest rate at its current low level and continue bond buying.
On the other hand, the euro failed to continue its surge after rebounding more than 11% since touching June's drought of $1.1874, yet it remains near three-month high against the dollar.
Concerning the euro-dollar pair, it reversed down to 1.3244 after hitting a high of 1.3307 where it found strong support at 1.3200 levels, while it recorded a low of 1.3226. For the rest of the day, the pair is expected to move between support and resistance at 1.2195 and 1.3325 respectively.
An upbeat German trade balance report released earlier today failed to boost the euro to continue its rally, yet it confirms the strength of recovery in the euro area following the strong second-quarter data and optimistic announcements by Trichet last week.
Moving to the sterling-dollar pair, it is showing slight decline on the daily and 4- hour basis in the absence of economic data from the UK today ahead of the release of inflation report later on this week. The pair is also predicted to stop its rally after the sterling has surged to above 5-month high against the U.S. dollar to trade in an overbought area as noted by momentum indicators.
Currently, the pair is trading at 1.5935 after recording a high of 1.5993 and a low of 1.5929, while it is expected to move between support at 1.5865 and resistance at 1.6025 for the rest of the day.
With regard to the dollar-yen pair, it is showing incline today as the rally in stocks damped demand on the yen as a refuge, yet the dollar remains hovering near 15-year low against the Japanese currency.
So far, the pair is trading at 85.65, reporting a high of 85.76 and a low of 85.28, whereas support is seen at 85.00 while resistance is at 86.35.