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Currencies Update: Dollar may rebound against majors
Written by article default Wednesday, 29 September 2010 10:43
The US dollar may rebound against majors after the dollar index fell to the lowest level in eight months as depicted by momentum indicators.The dollar index, which tracks the dollar performance versus six major currencies, plummeted to a low of 78.61 but rebounded to 78.85.
Stochastic Oscillator momentum indicator is bullish signs as the dollar is currently trading in an oversold are and set to do an upside correction.
Pressures increased over the last period on the back of the downbeat data and dovish announcements by the Fed which underscored concerns that another monetary intervention may take place soon.
Today, the US lacked fundamentals but the dollar is still impacted by the drop in consumer confidence to the lowest level in seven months yesterday.
With regard to the dollar-yen pair, it is continuing its downside direction paring most of the rise that took place after the BoJ intervention on September 15 which may raise speculation those Japanese policy makers may intervene again.
The pair is currently oversold and getting support from 4-hour charts and thereby an upside correction may be witnessed.
So far, the pair is trading at 83.72, reporting a high of 84.08 and a low of 83.48, whereas the trading range for today is among the key support at 83.00 and the key resistance at 85.20.
Concerning the euro-dollar pair, it is little changed traded near the opening level as debt concerns loomed after the rise in Portuguese and Irish yield spreads instead of holding German bunds to record high today.
Debt woes sparking in the region outweighed the improvement signaled in economic confidence which climbed to 103.2, the highest since January 2008, from the revised 102.3 last month.
Now, the pair is trading at 1.3591 where the breach of 1.3500 critical level paved helped the pair to rise to a high of 1.3642 after touching a low of 1.3564.
The trading range for today is among the key support at 1.3420 and the key resistance at 1.3775.
Moving to the sterling-dollar pair, it fell after a report showing that mortgage approvals fell for the fourth month to 47,372 in August from the revised 48,346 in July and following announcements by BoE's Posen who mentioned that the Central bank should buy more assets to enhance yesterday.
Meanwhile, the pair is trading at 1.5792 after falling from a high of 1.5873 to a low of 1.5760, whereas the trading range for today is among the key support at 1.5725 and the key resistance at 1.6000.