The euro edged lower today against the dollar after it touched a three-week high on Friday. World equities turned negative and demand for high yielding currencies fell on concerns over a slowdown in the global economy. The single currency remains fragile as the market is expecting Italy’s bond auction while fears about a eurozone debt contagion are heightened. Eyes turn to Germany’s IFO business sentiment due later today while European leaders are due to meet later this week.

The US dollar weakened on Friday weighed by a fall in the US Treasury yields. The greenback was also weighed by an unexpected fall in New Home Sales and a lower US Consumer Confidence Index. Versus the Japanese yen, the greenback recovered from a 10-day low at 81.97 to trade as high as 82.77 at the start of a new week. The pair was supported by Japanese importers but the pair remains under pressure as US bond yields have eased from their recent highs. The Australian dollar, which suffered significant losses versus the greenback last week, edged higher to 1.0492 from 1.0371 traded on Friday. The Aussie came under pressure after economic data revealed that China, Australia’s largest trade partner, may be facing an economic slowdown.

Oil jumped to 108.23 dollars a barrel from 105.15, a 2.98% rise. Gold rose to 1668.81 dollars an ounce from 1641.80. Gold edged higher to 1256.42 euro an ounce from 1246.83. Silver jumped to 32.36 dollars an ounce from 31.41. Stay in tune throughout the day with !

.EURUSD1.3220LONG @ 1.322030% of deals buy EUR
.USDJPY82.90LONG @ 82.8545% of deals buy USD
.GBPUSD1.5815LONG @ 1.582533% of deals buy GBP
.AUDUSD1.0420LONG @ 1.042057% of deals buy AUD
.GOLD1653.00LONG @ 1653.0064% of deals buy GOLD
.OIL105.70LONG @ 105.7060% of deals buy OIL
1 data generated by Trading Central, 2 data obtained from easy-forex Inside Viewer
CalendarCurrencyTime (GMT)EventForecast
.EUR08:00IFO-Business Climate109.6
.EUR08:00IFO- Current Assessment117.0
.USD14:00Pending Home Sales1%
Movers Shakers
The euro (EUR) produced a spectacular rally against the Australian dollar (AUD) rising as high as 1.2752 on Friday. The pair appreciated by 351 pips, and thus recorded a weekly return of 2.8%. Friday’s close was at 1.2676, and the next resistance level is at 1.2752. What is interesting to see is whether there the pair will continue its rally.