The euro rose against the dollar on Tuesday, helped by solid demand at sales of peripheral eurozone debt, while expectations that the Federal Reserve may debate more monetary easing kept investors away from the greenback. Irish, Greek and Spanish government debt auctions attracted decent demand, easing concerns about whether the euro zone's highly indebted countries can obtain the funding they need.
Spreads between peripheral eurozone and German bond yields narrowed, while European equities rose, lifting the euro to near a six-week high against a weak dollar. The euro was up 0.55 percent at $1.3135, not far from a six-week high of $1.3160 hit on Friday.
While the euro holds above the $1.3030 area, some chartists see its August 6 high of $1.3334 as an upside target, but there are hurdles before it gets there, including the 200-day moving average, which comes in at about $1.3220. The dollar index was down 0.38 percent at 81.022, edging towards a six-week low of 80.865 hit last week.
Against the yen, the dollar struggled, trading down 0.3 percent at 85.41 yen, but fear of more intervention by Japanese authorities to curb yen gains limited the greenback's losses. Traders reported stop loss orders around 85.20 yen. The dollar has failed to climb above its post-intervention high of 85.94 yen set last Friday, capped by Japanese exporter selling ahead of their half-year book-closing on September 30, and more sales are expected towards the 86 yen level before then.
Its 55-day moving average, now at 85.87 yen, has become a resistance level since Japan intervened last Wednesday, and further resistance lies at 86.26, the bottom of its daily Ichimoku cloud trend indicator. The dollar/yen pair has a very strong correlation to the spread between US and Japanese government bond yields.
Comments
Comments are closed.