The greenback was on its back foot today as traders sent the US dollar lower versus the majors for the second day in a row following better than expected European economic data.
At lunchtime during the European trading session, the dollar was lower across the board as equities moved higher. Strong gains have been booked at the expense of the greenback after a smaller than expected drop in British home prices and a better than forecasted German unemployment rate.
The best performers versus the dollar have been the Japanese yen and the Aussie dollar. The USD/JPY is down sharply at 81.50 from an opening day price of 81.90. Selling in the pair accelerated following a breach of the 81.80 support line.
Earlier in the day the Royal Bank of Australia left its benchmark interest rate unchanged at 4.75% while the RBA reaffirmed that its monetary policy is appropriate for the current market. Growth rates should be maintained and the economic damage from the Queensland floods will be negligible. The AUD/USD continues a two day rally into today and rose as high as the 1.0075 resistance level after opening the day at 1.0035.
The dollar selling may continue into the US trading session as traders eye the release of US manufacturing data later today.
The EUR/USD is pushing higher and has risen above last week’s high of 1.3770. Limited resistance stands in the way of the pair moving higher towards the November high of 1.4280. The next resistance is found at the November 22nd high of 1.3785, followed by 1.3970. Support comes in at this week’s low of 1.3570.
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Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
