The euro widens its losses ahead of the ECB rate decision

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The 16-nation currency continued its decline against majors for the fourth day due to debt concerns in the euro area ahead of May's rate decision later on today, while in the U.K. the pound retreated ahead of announcing elections. On the other hand, the yen and dollar strengthened against higher-yielding currencies; the dollar index, which tracks the dollar movements versus a basket of major currencies, rose to 84.30 from the day's opening at 84.16.

With regard to the euro-dollar pair, it is showing decline on the daily and 4-hour charts traded near the lowest level in a year on debt worries across euro zone members. Moody's said yesterday it may cut Portugal's credit rating amid fears that debt contagion will spread from one country to another.

As of 11:45 GMT, ECB will announce May 6 interest rate where the rate is predicted to remain at 1.00%, while Trichet may announce new measures to rein in deficit in the euro zone in the press conference following the rate decision. The 1999-introduced currency slipped to 1.2788 after breaching support at 1.3043 on Tuesday which may open the way for declining further to 1.2440. The pair opened at 1.2813, while it reached a high of 1.2856 and a low of 1.2735. For the rest of the day, the pair is predicted to move between support and resistance at 1.2695 and 1.2915 respectively.

As for the sterling-dollar pair, it is continuing its downside direction on the daily charts, where the pound is traded at the lowest level in nine months versus the green currency after the breakout of strong support at 1.5275 on Monday which may derive the pair to fall to 1.4855. The royal pound is still under pressure till elections show the winner, referring that having a minority government for the first time since 1974 is possible to occur in the current elections. Meanwhile, the pair is trading at 1.5072 reaching a high of 1.5146 and a low of 1.5010 while it is expected to move between support at 1.5030 and resistance at 1.5160.

Relative to the dollar-yen pair, it is showing slight decline on the daily charts, where the pair has snapped some of its earlier losses when it fell to a low of 93.27. The pair is currently trading around cluster support at 93.75 as worries in markets boosted demand on the yen as a refuge. Today, the pair hit a high of 93.97, whereas support is seen at 93.20 while resistance is at 94.00.

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