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Dollar retreats sending commodities to 2-week high
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Last updated: 2010-02-04 |
The world’s leading currency retreated today after reports showed that the housing sector’s pending home sales rose in the month of December by 1.0% meeting market expectations.
Investors pulled away from low yielding assets and turned into higher yielding assets along with equities as the economic outlook gained momentum thus energy prices spurred due to the weak dollar where it helped energy equities to rise in today’s trading session.
The U.S Dollar index; which measures the performance of the Green Benjamin against a six major currencies including the Euro, Pound and Yen continued to decline for a second consecutive day where the index opened at 79.315 where it currently trading at 79.018 after reaching the highest levels for today at 79.333 and the lowest at 79.975.
Furthermore, expectations show that the upcoming two days will witness rate decisions from the Norwegian Central Bank, the ECB and the BoE where all bank are projected to preserve the interest rates at the current levels therefore pressuring the Euro and the Pound to decline as expectations from Citigroup Inc. projects the European currency will witness a correctional move taking it to eight month-low after the pair closed below $1.3981, which comes below the 55-week MA and near the 200 MA levels of $1.3859.
The 16 nation currency usually corrects by 10 percent before it bounces back again as stated by Citigroup, where it expects the pair to undergo a correction from its November highs taking the pair to $1.3630. as for today’s trading session the euro-dollar pair is gaining on the daily scale where it breached yesterday’s resistance levels at $1.3901, the pair is in attempt to reach the upcoming resistance levels at $1.4066, in order to do so the pair must breach two resistance levels found at $1.3990 and $1.4026 but given the fact that the pair is trading in an overbought area; the pair is expected to drop again to reach the support levels witnessed at $1.3925 before descending again. The pair is currently trading at $1.3971 where it managed to reach the highest levels for today at $1.3974 and the lowest at $1.3884, while the upcoming key support and resistance levels for the pair are set at $1.3925 and $1.4000 respectively.
Moving to the cable, the pair continues to trade in a sideway triangle with a slight bullish move as it failed to breach the support levels at $1.5886, the pair is projected to continue rising as it trades in an oversold areas where volatility is expected due to the upcoming Rate Decision from the BoE. The pair is trading among the support levels of $1.5950 and the resistance at $1.6010 while it’s highly projected that the pair will drop on the four hour charts if the previously mentioned resistance levels remains intact, meanwhile the pair managed to reach the highest levels at $1.5993 and the lowest at $1.5900 as it currently trading at $1.5979.
The Yen gained against the Dollar in today’s trading session whereas the USD/JPY declined on the daily scale breaching the support levels at $90.43 and the pair is projected to continue to descend as the pair trades in a highly overbought area thus taking the pair near the ascending channel’s support levels at $89.69, the pair is currently trading at $90.37 where it managed to reach the highest levels for today at $90.91 and the lowest at $90.24. On the four hour chart that pair is attempting to breach the support levels witnessed at $90.35 in order to continue to descend but given the fact that the pair is trading on the four hour Stochastic Oscillator in an oversold area it could prevent the pair to descend further and rise once again above the previously breached support levels that converted into resistance. Therefore the pair’s intraday direction is to the upside if the $90.35 levels remains intact, the upcoming key support and resistance levels for the pair are set at $89.90 and $90.75 respectively.
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