The sterling resumed its advance against majors today after the BoE minutes for June's rate decision showed that there has been split where policy maker Andrew Sentance preferred an interest hike to 0.75% claiming that inflation became resilient after the recession.
On the other hand, the dollar retreated, ahead of the FOMC two-day meeting starting today, against a basket of major currencies, led by the pound, as seen by the dollar index which fell to 86.03 from the day's opening at 86.09, but it stopped its decline when it found support at 85.96.
With regard to the euro-dollar pair, it is showing slight decline on the daily and 4-hour charts after breaching support at 1.2330 yesterday. Today's data showed that euro zone manufacturing and services expansion eased in June which raised concern the economy may contract in the first quarter. The euro remains under pressure on bank concerns in France and Spain. S&P said Spanish banks will encounter some difficulties in the coming two years.
Meanwhile, the pair is trading at 1.2260 while recording a high of 1.2305 and a low of 1.2242. For the rest of the day, the pair is predicted to move between support and resistance at 1.2215 and 1.2330 respectively.
As for the sterling-dollar pair, it rallied for the second day on Tuesday after the breach of strong resistance at 1.4856 which paved the way for the pair to incline to 1.4893, where the pair is currently traded. The pound gained 0.8% over the past two days after Osborne had announced additional expenditure cuts of 30 billion pounds a year by 2014-15 yesterday. Hopes that these austerity measures will help the economy to cut its huge debt gave a lift to the pound that strengthened further today after the release of the BoE minutes. Earlier today, the pair recorded a high of 1.4941 and a low of 1.4800, while it is expected to move between support at 1.4820 and resistance at 1.4930.
Relative to the dollar-yen pair, it is moving south to continue its fall for the second day as the downbeat euro zone data and U.S. existing home sales released yesterday enhanced demand on the yen as a safe haven . The breakout of strong support at 90.34 pushed the pair further to the downside. The pair is currently trading at 90.13, recording a high of 90.59 and a low of 90.07, whereas support is seen at 89.10 while resistance is at 90.80.