Dollar Extends Drop against Majors

The U.S. dollar extended its drop against major currencies after news
emerged that Japan intends to buy European bonds, however fears over
the outlook of the European debt crisis continue to mount, as Portugal
seems to be the next victim after Greece and Ireland, where major
countries in Europe are calling for Portugal to seek aid, although
Portugal continued to deny the need for aid.

The U.S. Dollar index, which measures the performance of the U.S.
dollar against a basket of currencies including the Euro, the Pound,
and the Yen, declined on daily basis to trade at 80.86, compared with
the opening level at 80.97, while recording a high of 81.15 and a low
of 80.73. Gold prices slightly rose amid the dollar's weakness to
reach $1379.55, compared with the opening level at $1375.03 an ounce,
and oil prices rose to trade at $91.03, compared with the opening
level at $89.36.

The Euro was little changed against the Dollar today after sustaining
heavy losses last week, where the EUR-USD pair is trading at $1.2962,
compared with the opening level at $1.2964, while recording a high of
$1.2993 and a low of $1.2904. The pair is now trading above the
$1.2955 resistance level, and so long it remains above this level, we
should expect more upside movement and the target then will be the
$1.3080 support level, however, if the pair drops below $1.2955, the
direction on intraday basis will change to the downside and the target
is set at $1.2800.

The British Pound also rose today against the U.S. Dollar, where the
GBP-USD pair is now trading at $1.5610, compared with the opening
level at $1.5588, while the pair recorded a high of $1.5636 and a low
of $1.5513. The pair is now trading below the important level at
$1.5625 and so long it continues to trade below this level, the next
target is set at $1.5400, however breaching the $1.5625 level to the
upside would send the pair to the $1.5775 resistance level.

The U.S. Dollar rose against the Japanese Yen, where the USD-JPY pair
is now trading at ¥83.30, compared with the opening level at ¥82.72,
while recording a high of ¥83.49 and a low of ¥82.72. The pair is
now trading above the ¥83.20 level, which suggests that the way is
open to reach the ¥84.25, but the pair must remain above ¥83.20 in
order for this bullish scenario to continue, however, breaching the
¥83.20 to the downside would send the pair to the support level at
¥81.95.

Source: Fxstreet.com