The Japanese currency advanced against all majors as Moody's downgrade to U.S. and U.K. debt ratings to resilient and Fitch reduction to Greece's rating in addition to Dubai world debt rescheduling concerns ignited fears in markets and encouraged investors to buy the yen and dollar as refuges. The U.S. dollar also gained versus majors as indicated by the dollar index which rose to 75.97 from the opening at 75.74.
With regard to the euro-dollar pair, it is showing a decline on the daily and 4-hour charts. The euro reversed back from the high of 1.4867 to 1.4747 after hitting a low of 1.4725. The 16-nation currency is continuing its fall for the fourth day buoyed by Fitch announcements and the German industrial production which dropped today suddenly below estimates. The pair fell after breaching the strong support at 1.4780, while it is expected to face the next support at 1.4720 and next resistance will be at 1.4794.
As for the sterling-dollar pair, it is falling on the daily charts after breaching 1.6340 support level. Also, the sharp decline in manufacturing and industrial production data in the U.K. pushed the pair further to the downside. So far, the pound is trading at 1.6288 setting a high of 1.6475 and a low of 1.6253; while the coming support for the pair is seen at 1.6240 and the resistance is spotted at 1.6340.
Relative to the dollar-yen pair, it is declining on the daily charts heading from an overbought area as indicated by the Stochastic Oscillator momentum indicator rising for the four consecutive day. The pair will gain strong support at 87.84 which represents 23.6% Fibonacci retracement to the downside trend that started on August 10 and a resistance at 89.71 which constitutes 38.2% Fibonnaci level. Moreover, the Japanese economy announced $81 billion new stimulus which raised concerns that the second largest economy is still suffering. Now, the pair is trading around 88.44 after hitting a high of 89.51 and a low of 88.15.