Currency Report

The yen and the dollar rose against the euro and headed for record monthly gains as signs of a global recession led investors to seek safety. Japan's currency also advanced after the Bank of Japan lowered the target lending rate by 0.2 percentage point to 0.3 percent. The euro fell as inflation in the 15 nations that share the currency slowed to the lowest since January, making it easier for the European Central Bank to lower borrowing costs.

The yen climbed 1.4 percent to 125.48 per euro from 127.31 yesterday. The yen traded at 98.67 against the dollar, compared with 98.61. The dollar rose 1.4 percent to 1.2733 versus the euro from 1.2915.

The Euro was down at 1.2915 in late U.S. session after a volatile session yesterday. The pair has just attempted to get above the 1.2800 level, yet failed. In fact, I can see a tough congestion zone between 1.2800/1.2830 that could give the pair a hard time to the upside in the next hours. Above it, next important resistance will be around 1.2880, 1.2940 and finally 1.2975. Under 1.2745, 1.2690 will be exposed, and under that zone, 1.2655 will be the target to consider.

The British pound slumped against dollar through most of the day as the 61.8 percent fib of 1.7516-1.5257 at 1.6653 provided resistance. UK data didn't work well for the pair either, as UK Nationwide home prices dropped 14.6 percent in October from a year earlier.