FXstreet.com (Barcelona) - Risk aversion has returned to currency markets after increasing doubts about U.S. banks rescue plan being enough to revitalize bank lending. As a consequence stocks fell in Asian markets and investors flocked to buy Dollar and Yen, which acted as safe haven.
The EUR/USD fell from 1.3075, high on Feb 4, to 1.2872, to bounce mildly in Asian session, at the moment of writing the Euro Dollar is trading around 1.2931, with 1.30 and 1.3068 and 1.30 93, next key points on the upper side. On the medium term the Euro Dollar continues trading within an slightly upward channel from about 1.2700 to 1.3090, with higher bottoms each time.
The GBP/USD, has broken the narrow upward trend it had been trading since bottoming on Jan 23 at 1.3503. On Tuesday, the Pound dropped almost 500 pips to 1.4451, and the decline resumed on late Asian session reaching as low as 1.4395. On the Downside, the Pound could find support at 1.4363, Feb 5 low, and 1.4155; Feb 3 low.
Risk aversion has also favoured the Yen. USD/JPY has broken support level at 91.00, dropping 150 pips to support level at 90.00. next important levels on the downside are at 88.80 and 88.39.