The euro fell for the third day versus the greenback after Italy had announced a new plan to cut spending worth 24 billion euros to slash its sovereign debt through freezing public-sector wages and combating tax evasions. The announcement renewed debt concerns spreading in the region, thereby threatening both growth and financial stability.
On the other hand, the dollar index, which tracks the dollar movements versus a basket of major currencies, advanced for the third day to 86.90 from the day's opening at 86.53 as the breach of resistance at 85.95 on Monday smoothed the way for further rise.
With regard to the euro-dollar pair, it is showing decline on the daily and 4-hour charts to 1.2266 after the breach of strong support at 1.2320. The pair recorded a high of 1.2387 and a low of 1.2245 earlier today, while it is predicted to move between support and resistance at 1.2170 and 1.2390 respectively. Banking system worries along with the high budget deficit are weighing on the euro, thereby putting it under continual downside pressure.
As for the sterling-dollar pair, it fell to 1.4358, but still unable to remain below support at 1.4333 that the pair has been hovering around over the past seven sessions. U.K. lacked fundamentals today after the release of upbeat growth data yesterday. However, the main concerns remain on the new government's plan to cut deficit which is affecting the sterling. The pair recorded a high of 1.4446 and a low of 1.4328, whereas it is expected to move between support at 1.4265 and resistance at 1.4460.
Relative to the dollar-yen pair, it is showing slight incline as improvement in the U.S. economy is giving strength to the dollar against majors. The pair, however, is unable to remain above resistance at 90.34, where it is currently trading at 90.26 after hitting a high of 90.49 and a low of 89.97, whereas support is seen at 90.00 and resistance is at 90.70.