The Euro and dollar will continue to mirror on their own internal vulnerabilities for the short term. At this time there are signals for probable short-term range fx trading as markets can be really careful of fundamentals in both currencies. Given the overall multinational risk profile, the net result is sooner or later likely to be a more solid dollar, although the US currency will still find it difficult to gain solid support unless there's a key deterioration from the European banking arena.

The Euro reached resistance near to 1.4280 up against the dollar on Wednesday and also weakened to hit support within the 1.42 region, although brushed aside further losses since risk appetite was firmer and consolidated around 1.4250 right after failing to split above the 1.43 area once again. There will certainly be lingering anxieties over the Greek debt situation and the greater unfavorable influence on the financial field.

Additionally there is likely to be a delay prior to additional policy action is taken which could also be potentially detrimental to sentiment as sovereign-debt anxieties carry on. The Euro will still achieve some support on yield grounds with ECB officers still picking a firm tone. Fundamental confidence in the US overall economy and currency will continue to be weak, although the conclusion of quantitative easing in June ought to help stem selling demand.

Risk issues are likely to be typically less favourable that may offer some defending dollar assistance. Generally, the Euro will probably hold up in the vicinity of 1.43 and a move to the 1.40 area is still realistic, nevertheless the dollar will find it quite hard to break Euro support in this area.

The dollar found support underneath 81 against the yen during Wednesday and recovered to a high near 81.50 in US forex trading on anticipations of further merger-related flows out of Japan. General confidence in the Japanese economy signals to remain extremely fragile and the Bank of Japan will have to maintain a very expansionary policy to support the economic climate after the GDP contraction and downward revision to industrial production.

The buck pressed to a high around 81.75 on Thursday, although momentum for the moment is liable to stall in the 82.0 area. Buying US dips towards the 81 region signals to be the best approach.