By Rita Ruvinski
EUR vs. Majors:
The European currency edged higher against the Japanese yen Friday as firm Asian equity markets and commodity prices prompted speculators to dump the safe-haven Japanese currency in favor of higher-risk units.
The EUR rose to 136.03 vs. the Yen during the morning session, its highest level since August 24, after closing at 135.51 in late Thursday. Against the U.S dollar, the EUR traded around $1.4870, as players took profits on its rise to a 14-month high of 1.4967 Thursday. The currency’s late Thursday level was at $1.4956.
Despite EUR declines against the USD, Friday market sentiment towards the U.S currency remained negative. The greenback strengthened as some investors bet that the currency’s decline was overstated, given signs of a U.S. economic recovery. From a technical standpoint, the EUR remains slightly overbought versus the dollar which had prompted investors to adjust their positions, buying back the U.S currency.
However, the EUR is still headed for its 2nd weekly gain against the Dollar as European Central Bank officials are starting to signal a withdrawal of unconventional policy measures intended to combat the recession. Market players have taken that as a positive sign, benefiting higher-yielding currencies such as the EUR. Analysts said the EUR may rise further against the Yen and the USD if U.S. economic data and corporate earnings come in stronger than expected, increasing risk appetite for high-yielding currencies. The European currency’s next upside targets are at $1.5000 and 136.50 Yen, according to analysts.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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