The Japanese yen climbed to the highest level since 1995 versus the dollar and nine-year high against the euro on signs global recovery is losing momentum.
Later in the day, US home sales is expected to decline 13% in July which will reflect the weakness in the housing sector, while German business confidence is estimated to fall in August.
The latest data and forecasts are referring that global growth will ease in the second half of the year which is reinforcing demand on safe-haven assets.
With regard to the dollar-yen pair, it is showing sharp decline on the daily and 4-hour charts after the breach of support at 84.80 levels. The Japanese Prime Minister said today that sudden moves in currency market are unwelcome and he is watching market carefully. So far, the pair is trading at 84.26 after recording a high of 85.18 and a low of 84.14, while support is seen at 83.80 while resistance is at 85.15.
The dollar index, on the other hand, which tracks the dollar movements versus a basket of major currencies, rose for the fifth straight session to 83.40, recording a high of 83.51.
Concerning the euro-dollar pair, it dropped to 1.2617 but it rebounded slightly after getting support at 1.2607. Data released today showed that the German economy grew 2.2% in the second quarter but forecasts are referring that IFO business confidence released tomorrow will show a drop, especially after the Bundesbank said last week that the pace of progress will be normal in the second six months.
The euro-dollar pair so far has touched a low of 1.2601, while for the rest of the day the pair is expected to move between support and resistance at 1.2570 and 1.2685 respectively.
Turning to the sterling-dollar pair, it fell to 1.5398 where the closing below strong support at 1.5583 which represents 23.6% Fibonacci level to the upside trend that started since the end of May paved the way for the pair to decline further in the absence of economic fundamentals from the United Kingdom.
The royal pair touched a low of 1.5462, whereas it is expected to move between support at 1.5360 and resistance at 1.5475 for the rest of the day.