The yen and dollar strengthen on Greek debt worries

By IBTimes Staff Reporter | April 22 2010 6:20 AM

The Japanese yen and U.S. dollar advanced against majors after the EU said that Greece's budget deficit was 13.6% and may exceed 14%, above Greece's prior estimates of 12.9% which enhanced demand on refuges. The dollar index, which tracks the dollar movements versus a basket of major currencies, soared to 81.40 after breaching resistance at 81.30 compared with the day's opening at 81.21 and low of 81.03.

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With regard to the euro-dollar pair, it dropped on the daily and 4-hour charts after the renewed fears from Greece after the EU's announcement which raised concerns that the 45 billion euros aid from the EU and IMF may not be enough to tackle the huge debt. The pessimistic news outweighed the impact of the upbeat manufacturing and services which showed further expansion in April. Currently, the pair is trading at 1.3348 recording a high of 1.3421 and a low of 1.3341, whereas support is seen at 1.3295 while resistance is at 1.3405.

As for the sterling-dollar pair, it is showing slight decline on the daily charts after getting downside pressure from the 4-hour and 1-hour charts which caused the pound to pare its earlier advance. Today's data showed that U.K. recorded the biggest annual budget deficit since WWII. What is raising concerns more is that May 6 election may result in the formation of a weak government that is not capable of trimming the deficit. Meanwhile, the pair is trading at 1.5405 reaching a high of 1.5473 and a low of 1.5386 while it is expected to move between support at 1.5380 and resistance at 1.5430 then 1.5455.

Relative to the dollar-yen pair, it is declining on the daily and 4-hour charts where the pair has been moving between support at 91.65 and resistance at 93.76 over the past 12 days. The pair is currently trading at 93.04 after reaching a high of 93.33 and a low of 92.72, whereas support is seen at 92.25 while resistance is at 93.40.