The Euro tried edged higher during the Asian Session on Thursday after falling to a two-week low against the Dollar, which strengthened against a basket of major currencies yesterday, finding support following the US Congress’ approval of a 2-yr Government Funding, raising Government spending by $300 billion.
As the fears of a US Government shutdown eased off, the Dollar advanced, pushing the Euro back into a major decline yesterday, despite the release of positive Data from the EuroZone Economy.
Despite recent declines in the EURUSD pair, prices still have to break and hold below support levels at 1.2250 and 1.2210 to confirm a continued decline. The breach of resistance levels at 1.2310 would affect the recent bearish trend and introduce a sideways trend in its stead.
The rise of the US Dollar against the major currencies led the Australian Dollar to further decline and continue on a downtrend attempting to break the support levels at 0.7820. Stability below these levels will consolidate the declines and likely cause a test at the levels of 0.7740. A return above the resistance level at 0.7860 would however, temporarily ease selling pressure.
The US Dollar strengthened against major currencies yesterday, the Japanese Yen inclusive, on the back of the US Congress’ approval of Government Funding for the next 2 years.
The Japanese Stock Indexes attempted a recovery after a sharp decline which has lingered since the beginning of the week.
Technical reading shows that the USDJPY pair is trying to absorb recent selling pressure with the absence of any clear signals to reverse the downward trend. If the pair manages to break through 109.70 resistance levels, there is likely to be market correction towards an uptrend, and perhaps a test of the second resistance level at 110.20. On the other hand, a break of the support level at 109.50 would introduce an upward trend.
The Sterling advanced against its US counterpart during the Asian session Thursday, following the developments and Economic Data from the UK Economy.
The reading of the Halifax House Price Index released recently shows a contraction of 0.6% against 0.8% in December, in contrast to expectations of a 0.2% rise, amid expectations of a 0.50% rise in Interest Rates and an Asset Purchase Program of £435bn.
The return of selling pressures on the pair’s movement would reinforce a bearish trend. A break below the support levels near 1.3840 will consolidate the declines and may likely test the levels at 1.3750. A price reversal above the resistance level at 1.3945 would however, ease the temporary selling pressure.