Further depreciation marks the dollar's trading

By @ibtimes on

Violence in the Middle East continues to influence trading, where investors still focus on oil as Iran demonstrations played a major role in supporting demand for oil, as Iran is considered the second largest producer in OPEC.

Fear from demonstration spreading to Saudi Arabia, which is the number one oil supplier in the world, drove crude prices above $100.0 barrier. With all the focus on commodities, the dollar fell for the second day, where it reached the lowest level since November 2009, as witnessed on the US dollar index that tracks the performance of the currency against six-majors.

The index opened trading at 77.160, while setting a high of 77.180 and a low of 76.767, currently trading at 76.819.

Projections that the Federal Reserve will keep interest rates unchanged in the upcoming rate decision led the dollar to lose grounds against most of its counterparts, while the European shared currency traded higher against majors ahead of ECB's rate decision tomorrow.

The bank is expected to preserve rates for the upcoming month, but inflation threats could pressure policy makers to shift the bank's policy into more Hawkish rather than Dovish.

Trichet hinted earlier this month that the bank will not hesitate to increase rates incase inflation threatens recovery; this comes conversely with Bernanke's statements that the Fed will most probably keep rates unchanged.

The Euro maintained its upside trend, where it ascended to trade at 1.3817, compared with the opening levels of 1.3777, where the pair set the highest at 1.3841 and the lowest at 1.3741.

Further appreciation is expected as far as trading remains above the above the support at 1.3745, where a breach of the support may force a downside correctional move to be activated with targets set at 1.3507 and 1.3890.

As for the pound, the GBP/USD pair is in attempt to breach the resistance at 1.6300, allowing it to appreciate further targeting 1.6435. The pair opened trading at 1.6263 while setting a high of 1.6322 and a low of 1.6213 while currently trading at 1.6295.

The dollar gained grounds against the yen, after successfully breaching the pivot levels at 81.60, where investors turned bullish after it managed to sustain trading above the mentioned support levels.

The pair's trading range is bounded between the support at 81.60 and the resistance at 82.50

The USD/JPU pair is trading at 81.94, compared with the opening levels of 81.85 where it set the highest at 82.11 and the lowest at 81.80.

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