The European common currency climbed to above the highest level in two months after Spain had sold 15-year bonds worth 3 billion euros today at an average rate of 5.116%, where the sell was the maximum set for the auction.
Spain that has to repay 2.47 billion euros this month, managed to restore confidence in markets after this auction. However, the euro may gain more support after the announcement of banks tests results next week.
Earlier today, concerns spread after a report showing that the Chinese economy grew 10.3% in the second quarter lower than forecasts of 10.5% and the first quarter's expansion of 11.9%, which raised woes with regard the growth pace in China.
With regard to the euro-dollar pair, it is inclining on the daily charts, in the absence of economic fundamentals from the euro zone, after the Spanish bonds sell news. Meanwhile, the pair is trading at 1.2812 as the breakout of 1.2680 which represents a neckline to a bullish technical pattern paved the way for further rise. After recording a high of 1.2836 and a low of 1.2706, the pair is predicted to move between support and resistance at 1.2770 and 1.2895 respectively.
As for the sterling-dollar pair, it spiked to 1.5355 recording a high of 1. 5357, to continue the upside trend that started since mid May. The breach of resistance at 1.5270 then 1.5312 lifted the sterling to incline above highest level in more than two months against the green currency. The pair recorded a low of 1.5233 earlier today, while it is expected to move between support at 1.5270 and resistance at 1.5360.
The dollar, on the other hand, is showing slight decline against a basket of major currencies as reported by the dollar index which fell for the third day to 82.95 falling from the day's opening at 83.35. Later on today, JP Morgan will announce earning for the second quarter and manufacturing data is due.
The greenback dropped today after a weak retail sales report released yesterday and on pessimistic announcements by the Fed as it lowered the U.S. growth forecasts for the current year to range between 3.0% and 3.5% instead of 3.2% and 3.7%.
Relative to the dollar-yen pair, it fell on the daily charts as the dovish announcements by fed and uncertainty surrounding the strength of the U.S. recovery caused the yen to strengthen versus the dollar. Meanwhile, the pair is trading at 88.06, recording a high of 88.49 and a low of 87.83, whereas support is seen at 87.65 while resistance is at 88.65.