(MENAFN– ecpulse)
The U.S. dollar was trading slightly higher against major counterparts Monday in Europe, buoyed by expectations the Federal Reserve will continue tapering its monthly bond-buying program. The greenback edged up from seven-week lows against the safe haven yen.
Market participants were looking ahead to the outcome of the Fed’s monthly meeting due on Wednesday, amid expectations for a reduction in its bond buying program for a second time by another $10 billion to $65 billion from the current $75 billion.
Safe haven demand for the dollar continued to be underpinned amid concerns over the impact of the Federal Reserve scaling back its stimulus program and a possible slowdown in China. The selloff in financial markets was triggered after data last week pointed to a steeper than expected slowdown in Chinese manufacturing sector.
The dollar bounced against the yen with the start of the week, after the strong selloff that pushed prices sharply lower. The dollar so far gained 0.36 percent against yen.
Using 4-hour time frame, the USDJPY pair last traded at ¥102.642 following a session opening of ¥102.539. The pair so far hit a session high of ¥102.676.
The pair is likely to find resistance at ¥102.85-102.95, stabilizing above resistance level could strengthen the possibility of an upside move, while move downwards to break support level of ¥101.747 would be a negative sign for the pair.
The euro, meanwhile, pulled back from session highs set on Friday, trading slightly lower against the dollar during European session as problems in some emerging market economies bolstered safe haven demand for the dollar.
The euro previously touched session highs following the release of German IFO business confidence earlier in the session. Data showed business confidence rose to the highest level in two-and-a-half years in January.
As of 13:31 GM +2, the EURUSD last traded at $1.36724, based on the 4-hour chart. The pair so far hit a session high of $1.36964 and a session low of $1.36673.
The pair is likely to find support at $1.35290, stabilizing below that level today could strengthen the possibility of a downside move.
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