Risk appetite is restored in markets, after Australia unemployment slips while China stated that the head of the China's pension fund said that the shared currency will not be affected by the sovereign debt in Europe. As risk appetite is restored, investors tend to turn to higher yielding currencies versus low yielding currencies which boost the euro and pound in markets. The dollar is seen declining as the Dollar Index, which gauges strength of the dollar against six major currencies, is currently trading at 87.43 while recording a high of 88.04 and a low of 87.03.

The European Central Bank is scheduled to announce interest rates leaving them steady at 1.00% while following rate decisions; President of the central bank Jean-Claude Trichet is speaking at a conference giving us a highlight of the latest economic developments.

Ahead of the central bank decisions, we see that the euro dollar pair is rallying while currently trading at 1.2050 between the support of 1.1975 and the resistance of 1.2150 while recording a high of 1.2087 and a low of 1.1954. Over the one-hour basis, the technical charts are showing us that the pair is being traded close to an overbought area.

Turning to the United Kingdom, also the Bank of England is going to announce interest rates in which will leave them steady at 0.50% while continuing to pause the APF program. The pound is also rallying past the federal currency from the higher risk appetite in markets, increasing the appeal of the pound as it is considered a higher yielding currency. The pair is currently trading at 1.4599 while recording a high of 1.4627 and a low of 1.4506. The momentum indicators here also over the one-hour basis are showing that the pair is being traded close to an overbought area, as there is a support at 1.4540 and a resistance at 1.4680.

The dollar yen pair is consolidating over the four-hour basis while currently trading at 91.24 above the support of 90.90 and below the resistance of 91.80, so far the pair marked a high of 91.37 and a low of 90.83. The volume indicator over the one-hour basis is showing that there is low volume in markets.