Recent price action in the forex market indicates that the downgrades have already been priced in. EUR/USD is showing bullish signals even though the European Financial Stability Facility, designed to fund rescue packages for Greece, Ireland and Portugal partially with bond sales, lost its top credit rating at Standard & Poor’s after earlier downgrades of France and Austria. S&P said the rating was cut to AA+ from AAA. The rating company said “The EFSF’s obligations are no longer fully supported either by guarantees from EFSF members rated AAA by S&P, or by AAA rated securities. Credit enhancements sufficient to offset what we view as the reduced creditworthiness of guarantors are currently not in place”.

European Central Bank President, Mario Draghi said “I will never comment on ratings as such, but certainly one needs to ask how important are these ratings for the marketplace overall, for investors? It seems to a great extent markets have anticipated these ratings changes and priced them in. We should learn to do without ratings, or at least we should learn to assess creditworthiness”.

ECB President Draghi indicated the ECB will continue to intervene in bond markets to limit yields without ramping up its purchases. He urged EU politicians to implement budget reforms as quickly as possible to win back investor confidence. He said “The ECB, within the primary remit of price stability and within the remits of the Treaty, will do whatever it takes to assure financial stability. Decisions without matching actions are not enough and due care should be taken to implement measures in the correct sequence. We need to restore confidence in sovereigns and ensure that EU firewalls are operational and well equipped with an effective and flexible mandate”.

Today the Asian stock markets opened higher firm demand in France’s treasury bill auction eased concerns of an imminent flare up in the euro zone crisis. NIKKEI started the day at 8,420.12, previous close was 8,378.36. HANG SENG opened at 19,185.85, previous close was 19,012.20. Chief investment strategist at Russell Investment Group, Andrew Pease said “It does seem like markets are taking a glass-half-full view of Europe and they seemed to be very impressed by the liquidity that’s coming out of the ECB. Anecdotally, we are hearing China’s senior leadership is very, very concerned about the outlook in Europe, which tells you the bias is to ease policy more than they have already”.

EUR/USD is trading at 1.2729 by the time of typing and for today resistances are located at 1.2754 and 1.2810. Support levels are 1.2693 and 1.2632.

GBP/USD is at 1.5363. Resistance levels are located at 1.5393 and 1.5480. Supports are located at 1.5315 and 1.5236.

USD/CHF is trading at 0.9509 by the time of typing and for today resistances are located at 0.9542 and 0.9583. Support levels are 0.9501 and 0.9450.

AUD/USD is trading at 1.0371. Resistances are located at 1.0382 and 1.0451. Support levels are 1.0264 and 1.0216.

The economic calendar is heavy today and these data releases can cause high impact on the forex market so it is better to be careful and cautious. U.K. Consumer Price Index report will be released at 09:30 GMT. German ZEW Economic Sentiment report will be released at 10:00 GMT. E.U. Consumer Price Index data will be released at 10:00 GMT. Statistics Canada will release Foreign Securities Purchases figures at 13:30 GMT. Empire State Manufacturing Index data will be released at 13:30 GMT. Bank of Canada Rate Statement is due at 14:00 GMT.