Dollar rising off its knees after the harsh beating

By IBTimes Staff Reporter | April 12 2010 11:05 AM

The dollar started this week with a sudden and harsh shock to only embrace huge losses against the basket of major traded currencies. The wave of optimism that dominated markets following the weekend meeting by EU official in which they announce the details of the bailout which included a huge amount and seemingly sufficient to ease the worries in the market.

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The euro is trading to the downside versus the dollar, yet still is not sufficient to overcome the losses that greenback endured with the day's opening. The pair is trading among 1.3563 and 1.3691 with a downside bias. In generally the euro is trading positively when compared to Friday's closing, and the decline is merely an attempt to cover the opening price gap. The pair is now trading around 1.3590 support above the 50 Days MA at 1.3580 which provides the likelihood for the pair to continue the upside move shall it remain above the mentioned MA.

Sterling on the other hand declined versus the dollar, where greenback managed to limit the losses it faced earlier today; nonetheless, the case is still the same for sterling as it is for the euro which is trading positively in comparison to Friday's. Sterling was affected slightly today with Brown's release of his party's manifesto for the approaching election especially as the economy is the center of the debate on the back of a huge deficit burden to attend to.

Sterling traded today among the highest at 1.5484 and the lowest of 1.5363 with a clear downside bias; as we can see that this decline intends to cover the opening gap. The pair is currently trading between 1.5380 support and 1.5475 resistance.

Despite the dollar's decline versus the Japanese yen with the start of this week and the Asian opening, still the dollar managed to reverse and acquire gains versus the weak yen recapturing most of the acquired losses today and Friday. The yen was under a heavy selling wave after the spread optimism in the market pushing the dollar to extend its advance from areas at 92.87 to 93.60.

The USDJPY is currently trading among 92.90 support and 93.75 resistance with a clear dollar bias and likelihood for the pair to continue to the upside.