Seemingly the series of upside moves that was recorded by the dollar for three consecutive weeks have fatigued the federal currency, as reflected on momentum indicators, pressuring it to retrench today against a number of major traded currencies. The Dollar Index is currently trading around 77.50 declining from the highest set yesterday at 77.90.
The rising IFO confidence from the euro area supported the euro to indulge in an upside correction rising from the lowest set at 1.4303 recording its highest at 1.4411 and resumed to trade around 1.4385 with some upside bias. The trading above the major support level over the short term at 1.4285 will help the euro continue the upside correction. The IFO expectations has neared the 100 separation barrier and now stands at 99.1, adding to that the current account deficit shrunk helping stability spread across the region after the panic attack following Greece's debt downgrade.
Sterling also inclined today against the dollar to settle above 1.6155, sterling inclined sharply after setting its low at 1.6107 to record the highest at 1.6249 and is still trading above 1.6200. The heavy selling saturation that sterling was under pressured it into a correctional wave that might take it towards the next resistance at 1.6285 and that requires stable trading above 1.6185 over intraday basis.
The Japanese yen is indulging in a heavy downside wave versus the dollar, at the time European equities started the session with noticeable gains. FTSE added 1.3% and DAX advanced by 0.94% as of 10:44 GMT.
The yen declined versus the dollar after the BoJ kept rates intact and hinted for steady rates for a while as they continue to fight the drop in prices and fears of deflation. The pair inclined from 88.87 towards 90.31and trading stabilized above 90.00. The consolidation above 89.90 support might power a new bullish wave for the pair towards 90.75.