The Japanese yen and U.S. dollar strengthened against higher-yielding currencies after Germany imposed a ban on naked short selling to maintain stability in financial markets which aroused doubts that debt crisis in the euro zone will worsen. The dollar index, which tracks the dollar movements against six major currencies, edged up to 87.27 from the day's opening at 87.14 while it is expected to face resistance at 87.69.
With regard to the euro-dollar pair, it continued its downfall on the daily charts after the German ban decision which ignited fears in markets and encouraged investors to sell the euro and resort to refuges. However, the pair stopped its drop after getting support at 1.2125. The 16-nation currency is currently trading below the lowest level in four years against the green currency, and still oversold as seen by the Stochastic Oscillator momentum indicator on the daily charts. Debt woes are still causing worries in the euro region despite the $1 trillion bailout announced by the EU to salvage highly indebted economies. Meanwhile, the pair is trading at 1.2182 while reaching a high of 1.2228 and a low of 1.2141. For the rest of the day, the pair is predicted to move between support and resistance at 1.2160 and 1.2255 respectively.
As for the sterling-dollar pair, it fell to 1.4283 after breaching strong support at 1.4338. Today's news showed MPC members voted unanimously to holding both interest rate and APF unchanged in May as growth risks stemming from debt woes in the euro area pared concerns of the rise in prices. Still, the British government has a lot to do to cut the deficit without hurting recovery that started to gather momentum. Now, the pair is trading near the lowest level in 13 months, after recording a high of 1.4370 and a low of 1.4235, whereas it is expected to move between support at 1.4250 and resistance at 1.4335.
Relative to the dollar-yen pair, it is moving south on the daily charts as the tumble in stock markets and debt fears in Europe enhanced demand on the yen as a safe haven. The pair is currently trading at 91.40 after hitting a high of 92.24 and a low of 91.23, while support is seen at 91.00 and resistance is at 92.30.