The 16-nation currency snapped some of its earlier gains achieved this week, retreating from a high of 1.2722 against the dollar, after the rise in London three-month interbank rate to 0.76 percent which reflected the bank's need for funds, the thing that halted the euro's advance.
Yesterday, Trichet urged banks to retain profits to boost capital and benefit from the government's offers, noting that the increase of market interest rates rose is because of the bank's need for funds.
With regard to the euro-dollar pair, it is declining on the daily charts as the pair has reversed from an overbought area doing a downside correction, and after getting a downside push from the 4-hour and 1-hour charts which caused the pair to stop the upside trend that started on June 6. Currently, the pair is trading at 1.2622 while earlier today it recorded a high of 1.2722 and a low of 1.2607, whereas it is predicted to move between support and resistance at 1.2570 and 1.2720 respectively.
On the other hand, the dollar rebounded against a basket of major currencies, as tracked by the dollar index, after three days of decline, as it rested upon support at 83.70 which pushed it higher to 84.03 where it is currently trading, referring that the six-currency gauge rebounded today from a low of 83.61.
As for the sterling-dollar pair, it retreated after the sterling has touched its highest level against the dollar in five weeks. Today's data showed that the goods trade deficit widened in May to 8062 million pounds from the revised to 7411 million pounds which is raising concerns that the economy is not taking advantage of the pound's depreciation, thereby growth may be impacted especially amid the spending-cut plans announced by the government. Meanwhile, the pair is trading at 1.5107 after recording a high of 1.2503 and a low of 1.5077, while for the rest of the day, the pair is expected to move between support at 1.5080 and resistance at 1.5150.
Relative to the dollar-yen pair, it rebounded for the third day to halt the downside fall seen on the daily charts as support at 86.93 levels paved the way for the pair to rise to 88.53, after recording a high of 88.69 and a low of 88.31, whereas support is seen at 88.20 and resistance is at 89.45.