In the middle of the week the dollar fell sharply against the basket of currencies completely erasing its previous day advance.
The euro has advanced by almost 2% against the U.S. dollar reaching a daily high of $ 1.3990. Yesterday the single currency received some support from comments by German Chancellor - Angela Merkel on the need for termination the stimulus spending as the global financial crisis recedes.
Sterling rose against the dollar by 1.1 percent to a level of $ 1.5875. The "cable" has gained support after the British government presented a plan to cut spending by 83 billion pounds.
Against its Canadian counterpart, the U.S. dollar fell for the first time five days losing 1.2 percent to a level of C$1.0207.
Against the yen, the dollar fell to new 15-year low at ¥ 80,84. Nevertheless the Japanese currency also retreated against most major currencies. Yesterday the yen lost 1.2 percent against the euro falling to ¥113,36, while the sterling has advanced to ¥127,76, bouncing from the five-month low.
TECHNICAL OVERVIEW
EUR/USD
The picture around the pair remains neutral as the euro passed again above the key level at 1.3890, which is 61.8% Fibo retracement of the 1.5139-1.1876 drop. On downside the focus is moved on the formed bottom at 1.3700, followed by 1.3510, which is 50.0% FIbo retracement of the mentioned drop. On the upside, break above 1.4160 will put on target 1.4360, followed by 1.4577.
EUR/USD (chart, table)
USD/JPY
The short term picture remains negative as the pair continued to consolidate around its record bottom. So far the drop is limited by the support at 80.88 and if broken successfully next targets will be expected at the psychological 80.00. On the upside, resistance is seen at 84.10, which coincides with the 50- days SMA, followed by 85.90 and 86.40.
USD/JPY (chart, table)
GBP/USD
The sterling bounced back from its support at 1.5630-which is 50.0% Fibo retracement of the 1.7040-1.4237 drop and coincides with the 50- day SMA. On the downside below 1.5630 support is seen at 1.5630, followed by 1.5300, which is 38.2% Fibo retracement.
Break above the last top will put the target on 1.6372, which is 76.2% Fibo retracement, followed by 1.6720.
GBP/USD (chart, table)
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