The market is still rattled by the atrocious developments with the Greek deficit crisis. The latest episode of bearishness that haunted the market was on the back of downgrading fears for Greek credit rating. Later yesterday night, Standard & Poor's said that Greece's BBB+ might be downgraded by the end of March and Moody's followed with similar comments early today.

Fiscal imbalances have bubbled across nations in the wake of the worst crisis since the Greatest Depression, and the heat is on Greece, since the weak nation is suffering from recession, in need of around 53 billion euro to meet its obligations this year and as well should work hard to get its ballooning deficit down from the record 12.7% the highest in the EU, to the target at 3.0% of the GDP!

Data did not do good to salvage the sentiment today, especially as confidence stumbled in the euro area in February according to the European Commission data today as the recovery wanes. Equities were also pressured lower despite the overall, earnings were not that horrible.

Pressured by the aforesaid, the euro is the one paying the price for the fears over the deficit, with Greece trailed by Portugal and Spain will be burden on the recovery and weigh on the ECB's capability to maneuver. Especially that with the downgrade, Greek securities might not be eligible as collateral for the ECB once they reverse back to their normal standards!

Surrendering yesterday's acquired gains, the euro reversed against the dollar to the downside from the highs reached around 1.3620s. The pair today opened bearishly to set the low at 1.3449 to rebound to the upside to currently trade around 1.3490s. The 1.3575 resistance is still capable of pressuring the pair lower, and once it consolidates below 1.3485 it will be capable of extending its southern targets.

As for sterling, it also declined against the dollar on the prevailing pessimism, especially that UK themselves are in a critical place regarding credit rating, and though the speculation that aroused late last year eased, it is still circulating in the depth of the sentiment. The worse than expected investment data for the last quarter increased expectations for a downside revision to the GDP tomorrow, which already escaped the recession sluggishly with 0.1% expansion.

The pair declined to record its lowest today at 1.5269 after setting the high of 1.5420 which is strong resistance for the pair and continued to pressure it lower. Breaching 1.5390 as the pair is now trading around 1.53 is extending the downside bias to face once again the low set at 1.5270 support and then head lower towards 1.52 areas.

As for the Japanese yen, well the risk aversion and the bearish sentiment across financial markets, from weak currencies, falling equities and decline across commodities, the yen was the one to extend the gains in the face of the U.S dollar. It is merely the case of aversion today rather than continued dollar strength which the yen is proving as it continues to be the winning player.

The USDJPY declined to set the low of 89.19 after extending below the bearish pattern's neckline at 89.70 which we believe that consolidating below will keep the southern trip likely; as the patterns targets reside lower at 88.75 and 88.20. As far as 90.45 is intact then our odds are to the downside and now the pair is to attack its low to breakthrough the coming support at 89.15 which is getting stronger with support of oversold pressures on momentum indicators.