Daily Market Summary: Its all about the green back

As the G20 meeting gets underway in the Pittsburgh, currency traders are looking out for more tips to signal a dollar pullback. Global equities are said to be overvalued and over the last 24 hours, we have seen the DJIA, FTSE 100, S&P 500 as well as the Nasdaq index pare some of the gains they've mounted over the weeks. As issues of financial regulation and bankers' compensation top the agenda at the G20 meeting, analysts are looking out for any sign of a probable exit strategy from the various stimulus programmes despite regulators in US and UK warning of a slow and uncertain recovery. Contrary to major USD, the sterling got pounded to a multi month low following dovish comments from the Governor of the Bank of England. Here is an
hourly chart of the GBP/USD pair:



The sterling is eyeing the 1.6 support mark as RSI on a 4 hour chart shows the pair in oversold zone. Further downside is expected as recovery in the UK is expected to be slow but a near-term slide will ride on dollar strength. Mid-week reports from the BoE warns of a slow recovery but analysts see an open window for the BoE to expand its asset repurchase programme to further support the recovery process.

In the near-term, the Euro appears to have lost its upside steam. Breaking through the bullish trend line on a thirty minutes chart during New York trading hours point to a possible reversal. The dollar gained against the loonie as investors dumped equities in apparent loss of risk appetite ahead of G20 summit.