Currency market is witnessing volatility at the end of the week after Obama's plan to limit risk-taking by financial institutions which raised concerns that the financial conditions in the largest economy in the world is still fragile. Also, the possible tightening of stimulus in China added to worries. The U.S. dollar plunged against a basket of major currencies as indicated by the dollar index which slipped to 78.22 from the day's opening at 78.43, paring three days of decline.
With regard to the euro-dollar pair, it inclined on the daily and 4-hour charts. The pair rebounded after 3 days of decline, where the 16-nation currency reached the lowest in 5 months versus the dollar, as it became oversold as indicated by the Stochastic Oscillator momentum indicator. Meanwhile, the pair is traded at 1.4145 after reaching a high of 1.4166 and a low of 1.4064, where the coming support is seen at 1.4100 and next resistance is at 1.4205.
As for the sterling-dollar pair, it is showing a decline on the daily charts for the third day, but it trimmed losses after hitting support at 1.6075. The pound fell against the dollar after U.K. retail sales came in at 0.3%, below estimates of 1.3% despite the Christmas and yearend holidays. Currently, the pair is traded at 1.6130 after reaching a high of 1.6283 and a low of 1.6075, while the coming support for the pair is seen at 1.6100 and the resistance is spotted at 1.6240.
Relative to the dollar-yen pair, it dropped on the daily charts after breaching support at 90.34 heading to 90.18, where it hit a high of 90.56 and a low of 89.76. Now, the pair is expected to face the coming support level at 89.60, while the resistance is spotted at 90.55.