The 16-nation currency advanced against majors after the EU approved a plan for bailing out Greece through an IMF and bilateral loan. The euro's rebound halted the dollar's rally causing the dollar index, which tracks the dollar movements against a basket of major currencies, to retreat to 81.69 from yesterday's closing at 82.13. Meanwhile, movements in currency markets are calm due to the absence of fundamentals from major economies.
With regard to the euro-dollar pair, it rebounded on the daily and 4-hour charts after the EU endorsed Merkel and Sarkozy proposal of having a mix between IMF and EU help. In addition, Trichet revealed his happiness with the decision made for helping Greece, reversing his prior criticism to any external help for Greece. The euro rebounded from 10-month low versus the dollar and may have a better outlook in the coming period. The pair rebounded from an oversold area as indicated by the Stochastic Oscillator on the daily charts reaching 1.3383 while recording a high of 1.3407 and a low of 1.3265, where the coming support is seen at 1.3285 and next resistance is at 1.3410.
As for the sterling-dollar pair, it is showing a slight decline on the daily reaching 1.4867, retesting resistance at 1.4855 after touching a high of 1.4891 earlier today. However, the pound is still showing weakness and is currently traded in an oversold area, below the 1.50 psychological level. The pair hit a low of 1.4804 while it is expected to move between support at 1.4840 then 1.4795 and resistance at 1.4930.
Relative to the dollar-yen pair, it is continuing its advance this week where the yen is girding for the biggest drop against the dollar this year. Currently, the pair is traded at 92.78, hitting a high of 92.81 and a low of 92.28, whereas support is seen at 92.15 while resistance is at 93.00 then 93.30.