The 16-nation and royal pound currency gained against lower-yielding currencies as data showing improvement in Australian jobs and better-than-estimated growth in Japan enhanced demand on risky assets, driving European and U.S. shares higher.
On the other hand, the dollar index, which tracks the dollar movements against six major currencies, fell for the third day to 87.19 from the day's opening at 87.95.
With regard to the euro-dollar pair, it is showing incline on the daily charts for the third day after getting an upside push from the 4-hour and 1-hour timeframes. The euro rebounded from the lowest level in four years versus the green currency after the ECB had left interest rate unchanged at 1.00% and Trichet raised growth forecasts and inflation for the current year. He said the current interest rate is appropriate and the bond purchase is temporary by nature. President of the EU Van Rompuy said earlier today that the euro exchange rate at $1.17 is lower that its real value. Nevertheless, fears regarding the large debt that may curtail recovery may still affect the euro.
Currently, the euro is trading at $1.2116 where it is facing strong resistance at $1.2120 that was breached last Friday and caused the pair to open on a gap on Monday. The pair reached a low of 1.2115 and a high of 1.2118. For the rest of the day, the pair is predicted to move between support and resistance at 1.2045 and 1.2150 respectively.
As for the sterling-dollar pair, it also rebounded for the third day after where it is currently trading at 1.4643 with bullishness given by 4-hour and 1-hour charts. Today the BoE kept both interest rate and APF quantity unchanged at 0.50% and 200 billion pounds. Earlier today, the pair reached a high of 1.4653 and a low of 1.4506, while it is expected to move between support at 1.4605 and resistance at 1.4680.
Relative to the dollar-yen pair, it is trading near the opening price as seen on the daily charts. The confidence in markets after the stellar Asian data prompted investors to damp refuges led by the yen. The pair is currently trading at 91.25 after hitting a high of 91.46 and a low of 90.83, whereas support is seen at 90.90 while resistance is at 91.80.