Euro rebounds from a four-year low

By IBTimes Staff Reporter | May 27 2010 1:13 PM

The European common currency rebounded from a four-year low against the dollar following China's announcement that it is committed to invest in Europe, which slashed all speculations that the current debt crisis in Europe might alter and delay the global economic recovery. The world's leading economy released major fundamentals today showing that the economy managed to grow at an annual pace of 3.0 percent during the first quarter of this year, while analysts expected a growth rate of 3.4 percent, moreover, personal consumption rose during the same period by 3.5 percent, compared with the previous 3.6 percent that was reported during the first estimate.

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Investors sought risky investments along with high yielding assets such as the Euro and the Pound, thus pushing back the DJIA above 10.000 levels and enabling the Euro to slash all yesterday's losses against the dollar. Gold and oil rose slightly as the Dollar lost momentum against majors, where the U.S. dollar index declined to trade at 86.335, compared with the opening levels of 87.00.

As for trading, the euro-dollar pair reversed its trading, reaching $1.2351, compared with the opening levels for today that were set at $1.2177, while it managed to reach the highest levels today at $1.2385 and the lowest at $1.2152. Expectations show that the pair will enjoy a bullish trend throughout today's trading, targeting $1.2420, but for these expectations to prevail the pair must ensure trading above $1.2150.

Moving to the Royal currency, the GBP/USD pair rose on the daily scale to trade at $1.4544, compared with the opening levels of $1.4384, where it managed to reach the highest levels today at $1.4584 and the lowest at $1.4364. The pair breached the resistance at $1.4430 that paved the path for the pair to target $1.4625 levels, but for these expectations to prevail, levels at $1.4530 must remain intact.

Finally talking about the dollar's performance against the Yen, the USD/JPY pair surged in trading, where the pair opened today's trading at 89.92 while it managed to reach the highest levels today at 90.96 and the lowest at 89.79, meanwhile; the pair is trading at 90.73. Negative signs from the momentum indicator shows that the pair will suffer volatility in trading near the 90.70 levels and it might attempt to breach those levels before descending further to target 89.00 levels, which requires a daily closing below 91.10