The euro rebounds ahead of the ECB rate decision

 @ibtimes on August 05 2010 6:45 AM

The 16-nation currency rebounded, paring its earlier losses, ahead of the ECB rate decision. Policy makers at the ECB are predicted to keep the rate unchanged at its current low level to boost growth. The euro was also boosted by the upbeat German factory orders report which jumped to 3.2% from the revised reading of -0.1%.

On the other hand, the pound also did a slight rebound against the dollar before the announcement of August's rat decision and APF, where both are estimated to remain steady.

Concerning the euro-dollar pair, it rebounded to 1.3211 after hitting a low of 1.3117 where it found support at this level, but it halted its rise as it is currently facing resistance at 1.3210. The pair touched a high of 1.3217 after the better-than-estimated German news ahead of the ECB and Trichet's press conference. The pair is predicted to move between support and resistance at 1.2950 and 1.3065 respectively.

Moving to the sterling-dollar pair, it is gathering momentum to rebound from its earlier fall but facing downside pressure from momentum indicators as the pair is trading in an overbought area. The Sterling advanced above 5-month high against the greenback and inclined sharply after the breakout of 1.5500 resistance level which send the pair to 1.5884.

Earlier today, the pair recorded a high of 1.5909 and a low of 1.5817, while it is expected to move between support at 1.5610 and resistance at 1.5670 for the rest of the day.

With regard to the dollar-yen pair, it is showing slight decline ahead of the release of jobless claims which will reflect the strength of the U.S. economy after the better than estimated reports released from the U.S. this week. However, the pair is still moving around key level of 86.20, which has been strong support and resistance over the past two weeks. So far, the pair is trading at 86.06 after reporting a high of 86.44 and a low of 85.99, whereas support is seen at 85.75 while resistance is at 87.00.

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