Greenback slumped with the start of trading this week as optimism prevailed in markets after the better than expected GDP from Japan, which joined the lead of nations that have exited their technical recession. Asian equities managed to rise today and commodities alongside commodity indices were also trading higher, where gold managed to strike yet a new all time high at 1133.15. All those positive factors pressured investors into selling the dollar in search for higher yielding investments which weakened the dollar strongly against its major counterparts.
Affected by the fragile dollar, the euro managed to rise to 1.4993 from its lowest traded today at 1.4914. The decline that the pair set last week ended after the pair managed to find strong demand to reverse to the upside aiming at 1.5065 once again; the upside potential remains valid as far as 01.4880 remains intact. The inflationary data was not inline with expectations yet at the same time assured the decline in contracting prices which added more upside strength to the euro especially as prices have risen by 0.2% in October.
Sterling continued to advance versus the dollar, and managed to set its highest so far at 1.6750 yet we can see that the pair resumed to record its lowest at 1.6675 to test the support levels that should assure their capability of reversing the pair to the upside. The downbeat data from the United Kingdom has restricted Sterling's gains, where Rightmove house price index showed that prices fell by 1.6% in November confirming the continued pressures on the sector that remains fragile.
The optimism that prevails market has reflected upon the USDJPY today as we witnesses heavy selling waves on the dollar especially after the better than expected Japanese GDP which increased the demand for the Japanese yen, which powered it to add to its gains despite its weakness against the euro and sterling today. We are waiting for the US retail sales data which might affect trading and increase the volatility.