The U.S session marks a slight comeback for an oversold dollar, after the previous two sessions were marked by dollar losses, sparked optimism in the market following Bernanke’s indication that the recession is over, coupled with the positive data from the economy that was a break of joy for markets. Investors are unwinding their notion regarding the dollar being the refuge.
The stronger the positive sentiment the weaker the dollar is getting, as investors seek higher yielding investments. The dollar is back to correct after slumping since the morning against its rivals, where the market is in need of adjustment and the positive data from the US economy helped greenback gain some grounds.
Europe’s single currency reverted from its earlier recorded highs today after reaching overbought areas, where intraday indicators are pointing lower in need to relief negative momentum; the pair is now trading around 1.4655 support level which we expect might hold the pair from further decline, yet if the downside move extends its highly unlikely to extend beyond 1.4620.
Sterling continued trading south after it failed from consolidating above 1.6515-20 area which is a cluster resistance from 50 and 10 MA over 4H basis, meanwhile faced from below by the 1.6420s which are supporting the pair; we expect the pair to head again another upside attempt at 1.6520s which if four-hour closing was seen above will help the pair move further to the upside.
The yen weakened against the dollar in the American session, where the pair moved again to the upside after touching the low of the session at 90.12; failing to continue through alongside heavy selling pressures took the pair to the upside to retest 90.75 areas and failure to hold above that level will take the pair to retest the mentioned low where breaching that level opens the way for the pair to extend the downside wave.