Investors felt confidence today as lack of fundamentals from the world's leading economy helped boost growth outlook for the United States therefore the Dollar as always played a major role in markets; pressuring investors to turn away from low yielding assets in the search of higher yielding assets along with stocks.
The U.S economy showed that existing home sales inclined in the month of October above expectations along with speculation that the Federal Reserve will not raise its benchmark interest rate any time soon from the current record low levelstherefore boosting the appeal of commodities and stocks to investors as they seek other alternative investmentsto hedge against inflation and profit from the consistent eight-month rally in stock marketsthat led indices to trade at a 13-month high.
Existing home sales rose in the month of October by 10.1%, which is the highest level in two and a half year according to the National Association of Realtors, U.S stocks gained as well as investors see that the Fed will not raise its benchmark interest rates therefore keeping borrowing costs at record lows as Chicago Fed Chairman stated that interest rates will probably stay near record lows till Late 2010, Perhaps later.
Therefore, with investors' targeting high yielding assets the dollar plunged in today's trading session as seen on the Dollar Index, which gauge the performance of the dollar against six major currencies including the Euro, Pound and the Yen, as it sank today from the opening levels of 75.368 to reach a low of 74.946 before rising slightly to currently trade at 75.081.
Talking first about the performance of the Euro against the Dollar, the 16 nation currency managed to rise again today as seen on the daily chart, slashing therefore yesterday's losses as it managed to breach the resistance levels that were set at $1.4929 to currently trade at $1.4968. the pair is currently in an overbought area according to the four hour stochastic oscillator therefore a plunge is expected to the previouslybreached resistance levels mentioned above, which nowswitched to asupport, so that the pair could adjustsome momentumand complete its rise again to test the resistance level at $1.5069 before dropping once again in a correctional move. The pair managed to reach the highest level for today at $1.4999 and the lowest at $1.4831.
As for the GPY/USD pair, the daily chart indicates a strong possibility for the pair to rise again and slash Friday's losses in anattempt to reach the previously breached support levels at $1.6740, but the pair's tendency to drop on the four hour RSI and Stochastic oscillator might take it to the support levels at $1.6485, today's range of trading will be set among the support levels at $1.6485 and the resistance levels at $1.6740 throughout the U.S trading session where it holds a strong tendency to gain throughout the upcoming Asian and European sessions. The pair managed to reach the highest levels for today at $1.6647 and the lowest at $1.6470 as it currently trading at $1.6596.
Finally the USD/JPY pair continues to trade within the descending channel, driving the pair to test the support levels at $87.96 as it is considered a strong support level that will drive the pair to rise again; the pair is currently testing the descending minor channel's support level at $88.39 butis still expectedto rise on the daily chartto reachthe upmentioned channel's resistance level at $90.08. The pair managed to reach the highest levels for today at $89.18 and the lowest at $88.55 while currently trading at $89.05.
For Further Details regarding the pairs' trading rangeand points Click here.
For Cross Currencies Technical Analysis Click Here.