Euro and pound on the rise vs. dollar

By IBTimes Staff Reporter | May 21 2010 9:42 AM

Morgan Stanley, one of the biggest banks in the U.S. today announced that central banks were going to work together to support the central markets and the central banks included Europe, U.S. and Japan. As a result of investors feeling that markets were going to be supported by officials, we saw the dollar decline as a flare of optimism appeared in markets. The Dollar Index, which measures strength of the dollar versus six major currencies, is currently declining trading at 85.62 while recording a high of 86.04 and a low of 85.13.

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Ahead of the EU finance ministers meeting to discuss new ways they have to apply to tackle the debt crisis in Europe that is threatening the outlook of the euro zone, we see that the euro is on the rise as investors became optimistic therefore turning to higher yielding currencies versus lower yielding currencies. The euro dollar pair is currently trading at 1.2536 between the support of 1.2470 and the resistance of 1.2630 while recording a high of 1.2671 and a low of 1.2453. The RSI indicator over the daily basis is showing us that the pair is being traded in an oversold area.

Turning to the pound, we see that despite the UK deficit still swelled, yet it narrowed today although it remains at the highest levels since 1993, and from this data we see that the pound is struggling to rebound heavily, although it is rallying against the federal currency. The pair is currently trading at 1.4354 between the support of 1.4315 and the resistance of 1.4415, while so far reaching a high of 1.4473 and a low of 1.4316. The technical charts over the daily basis here are showing us that the pair is being traded in an oversold area supported by the momentum indicators.

The dollar yen pair is currently trading at 89.38 above the support of 88.70 and below the resistance of 90.50 while recording a high of 90.47 and a low of 89.02. The Stochastic Oscillator over the daily-basis, shows that the pair is being traded in an oversold area.