Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

FOREX-Euro regains footing as oil rises but Greek jitters weigh

Published 05/25/2011, 09:12 PM
Updated 05/25/2011, 09:16 PM

* Euro up as firm oil prices spur short-covering

* Charts show euro supported around $1.4000

* Dollar/yen little changed, faces resistance near 82.20-30 yen

By Chikafumi Hodo and Antoni Slodkowski

TOKYO, May 26(Reuters) - The euro regained some ground against the dollar on Thursday as a sharp recovery in oil prices induced short-covering, but lingering uncertainty over debt problems in Greece and other euro zone countries were expected to limit strong follow-up buying.

The safe-haven Swiss franc backed off from record high levels against the euro

The euro took a breather in early Asian trade as the dollar was weighed down slightly by strength in U.S. crude oil futures prices and other commodities the previous day.

"We really don't know how debt problems in Greece and other euro zone areas will be resolved, which would be negative for the euro, but for now strong oil prices are helping the single currency," said Junya Tanase, forex strategist at J.P. Morgan Chase Bank.

"Higher crude oil prices above $100 could be negative for the dollar, while the euro could benefit," Tanase said.

The euro was trading up 0.2 percent at $1.4120

The euro firmed against the Swiss franc, standing at $1.2321

"Safe-haven demand is keeping the Swiss franc buoyant, especially against the euro, but it's tough to take new longs in the Swissie from current levels," said a forex dealer at a Japanese securities house.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

The euro gained some support the previous day after Finland approved an EU/IMF bailout for Portugal, while demand from hedge funds also prompted a squeeze in euro short positions.

The market lacked energy to push the single currency further down, with a slew technical support levels cited below the psychologically important $1.4000-level.

The euro faced chart support at the 100-day moving average, now at $1.3996, while stop-loss offers are said to be lurking near $1.3968, a two-month low struck earlier this week on trading platform EBS.

Below that point, $1.3770 was seen as important as it is the 38.2 percent Fibonacci retracement of the euro's rise from June 2010 to May 2011.

On the upside, resistance for the euro was looming around $1.43 -- the area where the euro moved in the first half of May, a trader at a Japanese bank said.

The greenback was little changed around 82 yen

Market players were looking to test its one-month high of 82.20-30 yen in the near term.

Tokyo dealers said some offers were cited around the high of 82.20 yen, but that the dollar may pick up momentum should resistance be broken, Tokyo dealers said.

Stop-loss sell orders were cited at 81.80 yen and 81.20/30 yen, while U.S. and European investors, as well as macro hedge funds, showed appetite for buying dollars on dips, they said. (Additional reporting by Naohiro Kubo in Tokyo; Editing by Joseph Radford)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.