The 16-nation currency pared its earlier fall against the dollar as the bounce in equities eclipsed the downbeat German zew survey. The euro is continuing its rise that started last week when the euro rebounded from the lowest level in four years, while today it rose as demand at auctions in Spain, Ireland and Belgium managed to ease debt concerns in the euro area, especially after Moody's Investors Servicehad downgraded Greece to junk.
On the other hand, the dollar reversed its earlier advance against a basket of major currencies as it retreated from a high of 86.88 where it is currently trading at 86.40 while it opened that day at 86.66, as seen by the dollar index on the daily charts.
With regard to the euro-dollar pair, it is showing incline on the daily charts for the second day with the advance seen in stock markets which enhanced the buy of higher-yielding assets. However, still there are concerns regarding the huge sovereign debt in euro area countries that is threatening recovery. The euro rebounded from a low of 1.2166 after gaining momentum from the 4-hour and 1-hour charts. The single currency dropped earlier today after the downgrade of Greece to junk by Moody's Investors Service and as German investor confidence fell sharply in June to 28.7 from 45.8 in May.
Currently, the euro-dollar pair is trading at 1.2253, recording a high of 1.2266, while for the rest of the day the pair is predicted to move between support and resistance at 1.2160 and 1.2295 respectively.
As for the sterling-dollar pair, it rebounded after touching a low of 1.4680 due to increased demand on higher-yielding currencies boosted by the advance in stocks. Today, concerns with regard inflation eased as annual CPI for May slumped to 3.4% from 3.7%, the highest level in 17 months. Meanwhile, the pair is trading at 1.4746 after reaching a high of 1.4781, while it is expected to move between support at 1.4650 and resistance at 1.4850.
Relative to the dollar-yen pair, it is showing decline on the daily charts despite as the pair failed to breach resistance at 91.65 where it fell from to a low of 91.06. The pair is currently trading at 91.34, whereas support is seen at 90.60 while resistance is at 91.80.