Daily Forex Overview

Previous session overview

The euro touched a nearly six-week high against the dollar in Asia Monday as non-Japanese players unloaded bets against the single currency after its recent climb above key technical levels.

The European currency rose to USD1.3670 in early Asian hours, its highest level since March 24.

Most Asian currencies also surged Monday, driven by strong gains in equity markets across the region. Among top performers, the Korean won hit a fresh six-month high against the U.S. dollar, while the Singapore dollar hit a four-month high.

On Friday the Euro held to the USD1.3400 area before the US data prompted a rally that did not stop until above USD1.3600. The catch-up of the Euro post ECB allowed most of the crosses to gain led by the EUR/GBP and EUR/JPY.

The British pound remained under pressure versus most of the majors, but made headway against the big losers - the US dollar and Japanese yen - taking GBPUSD above 1.5155/65 and GBPJPY above 150.00.

The yen remained steady against the dollar as optimism in the recovery of the global economy helped increase risk appetite, encouraging investors to sell both safe-haven currencies.

The Australian dollar was firmer in Asian trade late Monday but slightly off a fresh seven-month high after stronger-than-expected U.S. employment data accelerated the recent surge in investor optimism.

Market expectation

The euro, pound and dollar are lower against the yen Monday, as investors add a little more risk aversion to their portfolios. As a result, the euro is likely to see more short-run downside though it's likely to be limited.

Yet some analysts say the dollar's sharp losses Friday may lead to a bounce this week as investors take profits. On the other hand, technical analysts warn that Friday's move could be the beginning of a much bigger move up by the euro against the dollar, especially if it can zoom through certain levels.

EUR drifted off highs through the balance of the session, touching a pullback low around USD1.3625/20 before recovering again into early Europe, currently trading around USD1.3640. Bids seen placed between USD1.3620/15, more toward USD1.3600. Offers seen at USD1.3650, with interest extending to USD1.3658, more toward overnight highs at USD1.3670, with offers noted between here and USD1.3680. Above here and rate can push on toward USD1.3700 ahead of USD1.3740/50.

For EURGBP resistance said to remain between stg0.8975/85, a break above to open a move on toward stg0.9000, with offers noted on approach, with further interest extending toward stg0.9010.

Most important events of the day