FXstreet.com (Barcelona) - Risk appetite has returned to markets, as stocks in U.S bounced up, Euro and Pound have returned to trade at levels well higher than on Thursday with Yen withdrawing against the Dollar.

After markets declining for two days on concerns about U.S. stimulus plan to revive credit flow, markets rebounded in the U.S. on Thursday, as better than expected retail sales gave a glimpse of hope to turn around the negative sentiment of the previous days.

Asian Markets have followed with Tokyo's Nikkei 1.3% up, and Australia's S&P 0o9ther 1.3% up on the back of news of the approval of a $28 economic stimulus pachage

Dollar pares gains vs Euro and Pound; Yen declines mildly

The EUR/USD has taken back losses posted on Thursday, bouncing back after hitting intra-week low at 1.2721 on Thursday's early U.S. session. On a positive reaction tpo U:S. retail sales, the Euro rocketed 200 pips up to reach resistance level at 1.2935/45 area.

The GBP/USD, the bigger loser on the week, has taken back 270 pips, after bouncing up from intra-week low at 1.4135 to 1.4400. If 1.4400 gives, the Pound could continue its climbing towards key level at 1.4550 before 1.5000.

The USD/JPY has bounced back from 89.80 low to break support level turned into resistance at 91.00, the Dollar is entering in slightly overbought area but if 91.00 holds the odds for a rally to 92.20 (Feb 6 high) would increase.