The British pound rebounded against majors after the announcement of budget deficit cut plan by Osborne today in front of the Parliament.
On the other hand, the dollar pared its earlier advance against a basket of major currencies as seen by the dollar index which is currently trading close to the opening at 85.98 after recording a high of 86.25 earlier today.
With regard to the euro-dollar pair, it is showing slight decline on the daily and 4-hour charts after breaching support at 1.2325. The euro remains under pressure due to the huge sovereign debt in euro area countries which is threatening recovery. Fears increased after Fitch had downgraded BNP Paribas credit rating. Also, ECB council member said that some European banks suffer from funding problems.
Meanwhile, the pair is trading at 1.2290 while recording a high of 1.2535 and a low of 1.2249. For the rest of the day the pair is predicted to move between support and resistance at 1.2240 and 1.2330 respectively.
As for the sterling-dollar pair, it pared its earlier decline when it fell to a low of 1.4685, approaching strong resistance at 1.4856. Today, Osborne announced additional expenditure cuts of 30 billion pounds a year by 2014-15. He said that VAT will be increased to 20% next year from the current 17.5%. The announcement lowered concerns that U.K. which has the largest budget deficit among the G20 nations will be able to tame the deficit which gave support to the pound. Currently, the pair is trading at 1.4812 while it is expected to move between support at 1.4730 and resistance at 1.4930.
Relative to the dollar-yen pair, it is moving to the downside paring some of yesterday's advance. Renewed debt woes in the euro zone enhanced demand on the yen as a refuge. The pair is currently trading at 90.65, recording a high of 91.09 and a low of 90.51, whereas support is seen at 90.00 while resistance is at 91.45.