The European common currency gained against majors ahead of the ECB offering to loans to banks at 1.00% only after the expiry of the 12-month tender today which alleviated concerns that banks will face trouble in paying debt to the ECB.
European banks have to repay 442 billion euros this month, but the ECB mentioned yesterday that it would fund banks worth 131.9 billion euros for three months which was lower than analyst's projections, thus worries that European banks are relying on ECB loans to restructure their impaired imbalances eased.
Conversely, the dollar fell against a basket of major currencies as seen by the dollar index which reversed its earlier gains as it fell to 85.84 after the breach of strong support at 85.96. The dollar is showing decline for the second day ahead of the release of important U.S. data, where ISM manufacturing is predicted to drop to 59.0 in June from 59.7.
With regard to the euro-dollar pair, it rebounded on the daily and 4-hour charts after approaching support at 1.2123 which helped the pair to surge to 1.2294, where the pair is currently trading. Earlier today, the pair recorded a high of 1.2310 and a low of 1.2191, whereas for the rest of the day the pair is predicted to move between support and resistance at 1.2150 and 1.2335 respectively.
The 16-nation currency dropped earlier today after Moody's said it may downgrade Spain's credit rating, and as China's manufacturing eased expansion in May. Today, euro zone' manufacturing halted at 55.6 in June but German manufacturing sector unexpectedly rose to 58.4 from 58.1 In May.
As for the sterling-dollar pair, it is moving to the downside for the third day after closing below 1.50 psychological level yesterday. The pair is doing a downside correction to the upside trend that started since mid May and was spurred by the drop in PMI manufacturing which slipped to 57.5 in June from 58.0. The pair is currently trading at 1.4912, recording a high of 1.4973 and a low of 1.4870, while it is expected to move between support at 1.49850 and resistance at 1.5070.
Relative to the dollar-yen pair, it is continuing its fall on the daily charts today but the pair is unable to remain below strong support at 88.20. Meanwhile, the pair is trading at 88.30, recording a high of 88.55 and a low of 88.06, whereas support is seen at 88.00 while resistance is at 89.55 then 89.30.