The euro inched higher on Tuesday but stalled just below chart resistance, as investors awaited to see if Greece's parliament will approve austerity steps that are critical for international aid that the country needs to avoid a default. The euro briefly rose to an intraday high near $1.4330 in early Asian trading, with stop-loss buying near $1.4310 helping add to its gains.
But it later lost steam, stalling short of resistance clustered near the $1.4350 to $1.4360 area, with market players citing talk of euro offers near $1.4320 to $1.4330. The euro edged up 0.1 percent from late US trade on Monday to $1.4295, adding to the gains made the previous day, when it enjoyed a short squeeze from a low of $1.4102.
One resistance level lies near $1.4362, the 76.4 percent retracement of the euro's drop from last week's weekly high down to Monday's $1.4102 low. A focal point this week is a Greek parliamentary vote on austerity measures expected on Wednesday and Thursday. An approval would likely encourage investors to rebuild positions in risky assets, said Koji Fukaya, director of global foreign exchange research at Credit Suisse Securities in Tokyo.
"There will probably some easing in the risk-off mode that the market is in, and such an outcome is likely to be positive for risky assets such as equities," Fukaya said. The euro's bounce on Monday helped drag the dollar index back below a downward trendline drawn off peaks hit in June 2010 and January 2011 that now lies near 75.55. A clear breach of that resistance and a mid-June high of 76.015 could set the dollar index up for further gains. Above the mid-June peak, the next major peak on charts is at 76.366, a high hit in late May.
The dollar index last stood at 75.279, having retreated from the previous day's high of 75.987. The dollar dipped 0.1 percent against the yen to 80.81 yen. Stiff technical resistance near 81 yen as well as dollar-selling by Japanese exporters, helped weigh on the dollar, market players said.
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