FOREX-Euro hits 3-week high, edges near resistance
The euro hit a three-week high against the dollar on Wednesday, supported by hopes for an agreement on Greece austerity steps and progress toward an aid package for Greece, bringing it near chart resistance that could limit its near-term gains. The euro edged higher in early Asian trade after Greek newspaper Kathimerini said in its online edition that details of the Greek government's mid-term fiscal plan were expected to be finalised by Wednesday night or Thursday morning, traders said. The single European currency rose to $1.4438 on trading platform EBS, its highest since early May, adding to gains it made on Tuesday. "For euro bears it is supra shoes becoming a tough situation, at least in the near term," said Junya Tanase, foreign exchange strategist for JPMorgan Chase in Tokyo. Worries about the risk that Greece may restructure its debt in the near term have ebbed, and that could open the way for the euro to climb, said Tanase, who sees the euro trading in a $1.42-47 range in June. After trimming gains the euro stood at $1.4408 EUR=, up 0.1 percent from late U.S. trading on Tuesday. The euro's rise against the dollar stalled just below resistance near $1.4454, a 50 percent retracement of a slide from its early May peak above $1.4940 to a two-month trough of $1.3968 hit last week. That $1.4454 level is also resistance on the weekly Ichimoku chart, with the tenkan sen, also known as the conversion line, coming in at that point. The conversion line can act as resistance or support depending on its location. "Our view is that Greece will get another package - perhaps with some token 'voluntary' lengthening of maturities but not significant enough to really damage private investors - and so the euro should rebound over the coming few weeks," said Rob Ryan, a FX strategist at BNP Paribas in Singapore. The euro held steady against the yen at 117.37 yen EURJPY=R, having touched a high of 117.80 yen on Tuesday, its highest since early May. Sporadic selling of the euro and dollar by Japanese exporters helped lend support to the yen on Wednesday morning, one trader said. The euro rose 1.5 percent against the yen on Tuesday, buoyed by a Wall Street Journal report saying Germany is considering dropping its push for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans for Greece. Adding fuel to the euro's rise versus the yen, Moody's Investors Service placed its credit rating on Japan under review for a possible downgrade on Tuesday, less than a week after rival rating agency Fitch revised downward its outlook on Japan's debt. The dollar got little help from the latest batch of U.S. economic data released on Tuesday. The data showed a double-dip in home prices, pessimism among consumers and a slowdown in regional manufacturing, raising concerns that the U.S. economy's soft patch could become protracted.