The European single currency pared some of its earlier drop versus the dollar after Greece had sold 1.625 billion euros of 6-month treasury bills in an auction that restored confidence in the 16-nation currency, outpacing the earlier negative impact that followed Portugal's credit downgrade by Moody's to A1.
Currently the euro is trading at 1.2580 rebounding from a low of 1.2521 while recording a high of 1.2613. The pair benefited from support at that level which may take the pair higher later on today, whereas the pair is predicted to move between support and resistance at 1.2505 and 1.2660 respectively.
However, the euro remains under pressure due to the financial instability spilling over the region. Trichet said on Friday that fiscal crisis are not over yet and banks should continue to accept help from the ECB. Thus, confidence may be regained if the banks stress tests results announced next week showed optimistic outcome.
On the other hand, the dollar index reversed its earlier gains as it retreated from a high of 84.54 to 84.19 close to the day's opening at 84.21, ahead of earnings in the United States.
Looking at the pound, it also rebounded against the dollar to 1.5077 after the breach of resistance at 1.5055, boosted by the data that showed an ease in U.K.'s inflation to 3.2% in June from 3.4% in May, yet inflation remains above the central bank's upper limit of 3% and the 2% target.
The pair rebounded from a low of 1.4962 to a high of 1.5116, while it is forecasted to move between the support at 1.5015 and resistance at 1.5145 for the rest of the day.
Concerning the dollar-yen pair, it fell for the second day but it stopped its drop as it approached strong support at 88.22. For now, the pair is trading at 88.33, recording a high of 88.86 and a low of 88.32, whereas support is seen at 87.65 while resistance is at 88.95.