Good day forex traders and readers.

It is the second day of the new trading week and I hope you are off to a good start. We currently have the EUR/USD testing the resistance of 1.38.

As I mentioned previously, an extended bullish target is 1.3850. With this close in sight, a further bullish target may be 1.3950. Regardless, do be reminded that while the US Non-Farm Payroll was weaker than expected, we are not looking at a major drop off and hence the current development may be simply short term in nature.

Find below more write up from Bloomberg on dropping dollar strength.

The Bloomberg Dollar Spot Index dropped to the lowest level in more than five months as a decline in currency volatility spurred investors to seek out higher-yielding assets.

The U.S. currency fell for a second day against the euro after a U.S. job report last week showed employers added fewer workers than economists forecast, damping speculation the recovery is gaining momentum. Australia ’s dollar strengthened along with the currencies of New Zealand and South Africa . The yen rose as the Bank of Japan refrained from adding extra stimulus at a policy meeting. The pound jumped the most in eight weeks after U.K. industrial production accelerated.

“There certainly has been more interest again in emerging markets , suggesting that many investors are again looking out for yield and that’s clearly a risk-on scenario that is dollar-negative,” said Jane Foley, senior foreign-exchange strategist at Rabobank International in London . “We can also blame the payrolls a little bit. It wasn’t as strong as some people had been anticipating.”

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major counterparts, declined 0.4 percent to 1,011.10 at 7:10 a.m. in New York after falling to 1,010,88 the lowest level since Oct. 31.

The dollar dropped 0.2 percent to $1.3766 per euro after sliding 0.3 percent yesterday. The greenback depreciating 0.5 percent to 102.56 yen after sliding to 102.52, the weakest since March 28. Japan ’s currency rose 0.4 percent to 141.15 per euro. Currency Volatility

The JPMorgan Group-of-Seven Volatility Index declined to 6.75 percent, the lowest level since August 2007, before being little changed 6.78 percent.

The Fed will tomorrow release the minutes of its March 18-19 meeting, when policy makers reduced monthly bond purchases by $10 billion to $55 billion. Fed Chair Janet Yellen said […]

Click here to view original article at www.bloomberg.com

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EUR/USD Update : Dollar Declines as Investors Seek Higher Yields; Pound Advances

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