Testimony Disappoints the Dollar...

Source: Crown Forex

The session's highlight was upon Bernanke's testimony before the House Financial Services Committee. Fears have been rising lately and pressuring U.S equity markets as Fannie Mae and Freddie Mac might extend their problems tied to the U.S mortgage crisis and the Federal backed lenders might be facing capital crisis still.

The testimonials though failed to support the Dollar opposed to expectations as Paulson's defense to the government supported lenders and that they are going through rough times which they are adequately capitalized to face such times. While Bernanke was targeting his testimony at now and future reforms that are aimed to secure markets with no clear indication for markets such as they were looking for. The indication was given that the financial system and U.S markets are long to revive and more scrutiny is added to the extent of ongoing losses and write-downs as now the economy is still fragile setting behind any rate hikes for the fed as markets remain sensitive for liquidity.

The disappointment left the Dollar weaker as the Euro raced to set the new high at 1.5786 and trading higher will take the Euro to face the critical resistance at 1.5830s which will be cleared as trading solidifies above 1.58 levels. While momentum indicators support the bullish rise further.

Sterling was also pulled to the upside attempting the critical resistance level at 1.9820 to set the high at 1.9823 retreating back then to now trading levels at 1.9760s though momentum is valid to support another attempt at the resistance level which is the Pound manages to close above on daily terms will extend the upside wave till $2 barrier.

The USD/JPY reversed the downside as well after recoding the high today at 107.42 and the fresh low as set at strong support level of 106.69 this level if breached will provide further bearish momentum for the pair to continue to the downside which might take the pair till 105 levels once more which will be confirmed furthermore by solid trading below 106.20s and closing on a daily basis below the previously mentioned support level.