n this week an upside trend, beginning from the speech of the president of European Central Bank (ECB) Triche after rate up 0.25% to 4.00% in spite of negative data on the labour market in the US, continues in this week and greenback extends gains against main European currencies like the Euro and the Pound. In the Asian market EURUSD tested the minimum at $1.5628, but soon rebounded to $1.5648 by buying from Asian state founds. USDJPY broke the session high at Y106.67, hitting the session high at Y107.25.
Analysts made up a conclusion that the cause of Euro down was Triche’s speech just after rate up 0.25%. Traders took the speech not enough decisive and doesn’t give any hope of further monetary politics in the Euro zone and pointed at possible reduction of economic activity. In fact indexes of economical activity in the Euro zone show negative pictures. France and Italia are fully in the negative zone that point to coming reduction of economy. So is the US. ISM (service) index in the US fell to 48.2. In this week a speech of US central bank is expected and traders wait for more or less clear allusion of further monetary politics. If there is no comment on monetary politics in a speech, the expectation for Dollar consolidation will disappear. Taking into account lip-service of US president who want to support “strong Dollar”, Mr Bernanke may speak something about rate politics.
From point of technical view, the American Dollar tested against the Japanese Yen Y107.65 which is the same level of 200-day moving average. If USD confidently goes through the level, the break must pave the way to the June and February minima at Y108.58 and Y108.61. The greenback has now upside trend from the beginning of the European session. Stochastic and Momentum are in this moment giving a negative sign that means possible correction of currency course in a short-term perspective.
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