The market is again heading to higher yields and the optimism eased the pressure off the euro that was hammered with bearish momentum this month on the back of the Greek debt crisis; this month it feel again most active trading currencies as the bets continued to slim over the recovery outlook for the nation.
Good fundamentals from Asia where responsible for reviving hope for the outlook for the global economy; Japanese retail sales advanced and industrial production increased while Australian bank lending rose and all led to rising equities, commodities and higher yielding assets and currencies.
The dollar and the yen mainly weakened as investors shunned the haven of low yielding currencies; the dollar index today dropped from opening levels at 80.72 setting the high of 80.80 from where it continued to trend south setting so far a low of 80.40.
The single 16-nation currency, the euro, took advantage of this sentiment and was capable to unload some of the heavy losses it endured. The EURUSD indulged in an upside correction as investors took a breather from speculating further losses for the currency and paused their anticipation for the worst to come. The pair inclined to record the high of 1.3628 rising off the lows recorded at 1.3528; the pair's failure in closing below 1.3485 supported the upside correction today which we expect will prevail as far as trading is to rise above 1.3655.
As for the royal currency, the ONS figures which confirmed a faster than anticipated exit from the recession in the past quarter was not sufficient to support the pair. The GBPUSD set the high today at 1.5317 and pressured by 1.5345 resistance the pair continued to trend south to record the low of 1.5225 and still lingering soft though as far as 1.5170 is intact we favor a bounce back to the upside amid prevailing dollar softness.
The buying pressures eased on the Japanese yen and that allowed it space to weaken versus the dollar as the USDJPY pair head to the upside. Nonetheless, after touching the high of 89.50 the pair is trending south gradually towards earlier lows at 89.03 targeting further downside movement towards 88.75.