Forex - Dollar rise against Yen as investors buy again riskier assets

Forex News and Events: The Dollar advanced against the Yen and Euro on Monday as stabilizing financial markets raised optimism that the worst of the financial crisis might be over, encouraging some investors to buy riskier assets. Analysts said the dollar also got some support as traders were reluctant to buy the Euro ahead of the European Central Bank policy meeting on Thursday and the G7 nations' gathering late in the week. Global Dollar’s sentiment had improved but worries about the overall health of the US economy continued to cast a pall over the market. Data on Friday showed the economy shed jobs again in March for a third straight month Yesterday, EurUsd was down 0.15% at 1.5705. UsdJpy gained 1.03% to 102.54, after earlier spiking to 101.51. UsdChf was up 0.72% at 1.0134 rebounding from 1.0057 low. GbpUsd went lower to 1.9884 -0.23% after posting 1.9835 intraday low.  The Dollar's gains overnight were also supported by reports of Japanese pension funds buying overseas assets as they start their new financial year, said analyst.  Central bankers and finance ministers from the Group of Seven rich nations meet in Washington later this week and are expected to discuss a broad range of proposals aimed at restoring confidence in the battered banking system. These measures would be seen as boosting the Dollar, which has been pressured by aggressive monetary easing by the Federal Reserve. Analysts confirmed that ahead of the G7 and ECB (meetings), people are not going to get aggressive in terms of buying the Euro and nobody really knows what comment ECB President Jean-Claude Trichet will deliver for the strength of the Euro.  The Fed has slashed its benchmark overnight lending rate by 3% to 2.25% since mid-September, wiping out the Dollar's yield advantage against the Euro. The ECB is widely expected to leave its key rate on hold at 4%, while the Bank of England, which also meets on Thursday, is seen cutting rates by 25bp to 5%.

Today's Key Issues (time in GMT): 05:00 JPY BoJ two-day Monetary Policy Meeting 08:00 TRY February Industrial Production 8% vs 11.7% 13:15 CAD March Housing Starts 220k vs 256.9k 15:00 USD February Pending Home Sales Index previously 85.9 15:00 USD February Pending Home Sales Index -0.7% vs 0% 19:00 USD Minutes of March 18 FOMC Meeting 22:00 USD ABC/Wash Post Index -34 vs -33

The Risk Today: EurUsd Euro posted all-time high 1.5904 last month. Medium term trading range is set between 1.5400 – 1.6000. Strong support hold 1.5528 (23.6% retracement of 1.4311-1.5904 advance). Psychological 1.5000 level marks strong key support before 1.4500 pivot point. Initial resistance hold 1.6000 key level. Initial support hold 1.5511 Thursday low. GbpUsd Euro posted all-time high 1.5904 last month. Medium term trading range is set between 1.5400 – 1.6000. Strong support hold 1.5528 (23.6% retracement of 1.4311-1.5904 advance). Psychological 1.5000 level marks strong key support before 1.4500 pivot point. Initial resistance hold 1.6000 key level. Initial support hold 1.5511 Thursday low. UsdJpy It rebounded from 95.74 Mid-March low. It marks the end of a 4-week downtrend. 100 level marks pivot point. Bottom support holds 95. On the Upside, last week return over 100 may open the way up to 110.10 strong (Trendline) resistance and mid January double top ahead of 111.92 early January high. Strong support holds 95.74 last month low. UsdChf Market remains weak below 1.0200, having traded below 1.0000 psychological level late March. Strong support holds 0.9639 17th March low. Uptrend would only return over 1.0200 resistances. Early January double top 1.1191 marks strong resistance.

Resistance and Support: EURUSD GBPUSD USDJPY USDCHF 1.6000 2.0577 111.92 1.1191 1.5904 2.0447 110.10 1.0500 1.5832 2.0100 105.00 1.0200 1.5765 1.9780 101.90 1.0080 1.5528 1.9730 100.00 1.0000 1.5400 1.9337 95.74 0.9639 1.5000 1.9105 95.00 0.9500 S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot