Forex Daily Review Asian Session – US Dollar is still soft against most of its major counterparts

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The Euro hit a four and a half month high of 1.4239 against the frail Dollar prior to the Asian session. However the EURUSD pair managed to hold its day gains during the Asian session despite the fact that as it was trading within a range of 29 pips. The European Unit found sound support from Jean Claude Trichet hawkish comments on Monday afternoon, as he stated that the ECB is ready to act decisively to protect the Zone from the rising price pressures, signaling for a rate hike on the next policy meeting of the Bank despite the impact from Japan’s catastrophe on the global economy. Trichet’s comments reinforced the forecasts of a rate rise on April and consequently the Euro climbed at 1.4200 levels against the US Dollar, which is rather nonchalant lately due to the high oil prices. The EURUSD pair is trading at 1.4217, preparing to retest November’s high of 1.4281 which is considered as the closest strongest resistance point.

If somebody observes the hourly charts will realize that the GBPUSD pair had a rather similar course with the EURUSD pair, since traditionally the two major pairs are positively correlated. The Sterling was mainly dragged upwards from the Euro dynamics. The GBPUSD pair holds strongly on the 1.6300 levels, with investors focusing on British consumer inflation data which will be released later today and in the case that the outcome will abide the positive expectations the British Pound will rally towards its fifteen month high of 1.6456 against the greenback. Currently the Sterling is trading against the Dollar at 1.6298. The GBPJPY pair still holds is gains from the Friday’s intervention as it is trading now at 131.94.

The risk appetite has returned to the markets, the commodities prices moved higher and as a result the Aussie has accelerated claiming a good spot above parity, though still in a distance of some 100 pips from its thirteen days high of 1.0157, achieved prior to the broad decline during the previous week on the back of Japan’s disaster. The AUDUSD pair was traded throughout the Asian session in a very tight range, from a session high of 1.0036 to a session low of 1.0067. Now the pair is trading close to the upper limit of the range at 1.0058.

The US Dollar climbed to a session high of 81.27 against the Japanese Yen, after Yoshihiko Noda made it clear that the BoJ, his Ministry and the G7 members watch closely the currency markets for any speculative moves and they are ready to take further actions if it is needed. The USDJPY still holds its pace after the intervention stimulating the Japanese economy. The USDJPY pair is trading now at 80.86, with more gains expected in the week despite the overall Dollar weakness in the markets. The EURJPY pair has extended its rally climbing to a session high of 115.51. However the cross pair is now trading lower at 115.03.

The gold despite the fact that the Middle East crisis tents to fade has climbed higher today, mainly driven by the higher oil prices. The precious metal ended to a session high of USD 1431.1 an ounce, still 13 US Dollars below the all time high price. Gold is now trading at USD 1429.0 per ounce, few minutes from the closing of the Asian session.