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Currencies Update: Dollar deceleration activated!c
Written by article default Friday, 24 September 2010 09:31
The more than expected drop in durable goods orders assured markets that the state of the economic recovery is indeed in deceleration and that the Feds are likely to move with further QE. Further stimulus and monetary easing kept the downside pressure on the dollar which continued to lose its appeal and fall further versus its counterparts.Due to the dollar’s weakness and with the power of better than expected IFO confidence figures from Germany, the euro continued to count the gains. The euro advanced versus the dollar after reaching 1.3284 in the Asian session, stabilizing above 1.3305 provided the pair with further bullish strength to record the high of 1.3454. The euro is currently trading around its highest among 1.3380 support and 1.3490 resistance.
In spite of sterling’s weakness it still managed to advance on the back of the weak dollar. The pair rose after it reached the low of 1.5639 advancing to the high today at 1.5795 and still trading positively near the high especially with stability above 1.5725 which might power the pair to test the resistance areas at 1.5800 and 1.5875.
As for the Japanese yen, the currency suffered its own weakness, or rather we can say the bliss of weakness as it is the prime objective of Japanese officials. News today cited another intervention from Japan and a new selling wave which kept the Japanese yen fragile. Still the dollar’s weakness was sufficient to take the pair lower from the recorded high at 85.38 to the lowest at 84.18. The dollar still has a chance according to harmonic perspectives as stability above 84.00-83.85 might take the pair to the upside once more.