The Dollar rises against the Euro as investors see the rally unsustainable

The greenback rose the most against the euro in almost two months, after the European currency failed to exceed a level above $1.50 that trading patterns indicated would have propelled it higher. “At some point, the euro will fall victim to its own success,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. “We’ve seen the euro touching new highs but really struggling to extend them significantly.” Technical analysis studies patterns in charts to predict future changes in foreign-exchange rates, stock prices and bond yields.
Support is an area where traders may have placed orders to buy a currency versus a counterpart. The euro’s gains earlier today were held in check by resistance at the 76.4 percent Fibonacci retracement of its decline from the record high of $1.6038 on July 15, 2008, according to a Citigroup Inc. research report. The level was $1.5074, about a tenth of a cent higher than the euro’s peak today, Citigroup’s logarithmic chart shows. The EUR/USD is currently trading at $1.4870 as of 20:30PM, London Time.

Sterling hit a one-week low against the dollar and the euro on Monday after a surprise contraction in UK economic growth dashed recent optimism the country is recovering. Last Friday's data prompted investors to acknowledge it is too early for the Bank of England to remove its stimulus for the economy, and that quantitative easing may be extended as soon as next month. Sterling recouped some losses on Monday as traders adjusted short positions in the currency, but many in the market said the ongoing weakness in the UK economy would keep the pound under downward pressure. Friday's dismal GDP data had clipped a two-week rally in the pound, which had recovered from a seven-month low against the euro after some upbeat data and comments from BoE policymakers instilled a degree of hope about a recovery in the UK economy.
The GBP/USD is currently trading at $1.6330 as of 20:33PM, London Time.

Canada’s dollar as the head of the nation’s central bank reiterated concern the currency has grown too strong and crude oil and stocks tumbled. “It’s probably continued fallout from comments from the central bank’’ driving down the Canadian currency, said Paul Ferley, assistant chief economist in Toronto at Royal Bank of Canada, the nation’s biggest bank. “Certainly the bank made it quite clear that they didn’t think economic conditions warranted moving ahead with any interest-rate hikes. The markets had started to factor in a hike in March but the bank’s comments dampened that.” The USD/CAD is currently trading at 1.0660 as of 20:35PM, London Time.

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