On Tuesday the European currencies have recovered positions against the dollar. European stocks rose driven by Spain's preliminary GDP reflecting a level of recession slightly better than expected, and Italian borrowings costs dropped at an auction of five and 10-year debt as investors shrugged off a threat by former premier to topple Monti’s government.
The New York Stock Exchange remains closed for a second day due to weather. The most important report of the day, the consumer confidence data released by the Conference Board, has been postponed.
The European session provides some interesting movements of the euro, which is recovering from the 1.2880 support. The crossover that joins the dollar has its first resistance in a downtrend line; it passes through the high of the day, 1.2960. If it is broken, according to the time and RSI indicators, it could lead to the 1.30 area in the coming hours.
Sterling also regains ground right now; it is away from 1.6020, a minimum touched early. Its trend is up against the dollar, and it may reach the area of 1.61 during this session.
The lowdown, however, is provided by the yen. The Bank of Japan announced its monetary policy, as well as an injection of local currency that was well below market expectations. The yen gained strength immediately (which technically was looming on Monday, with a break of uptrend line at 79.70), and goes back to the 79.10 area, first holder of importance. The USD/JPY pair also offers a turnaround figure – “head-and-shoulders”, which has its goal in the 78.80 area.