Good morning from wonderful Hamburg. Today we are going to see two very important new rate decisions by the BoE and the ECB. They are both expected to cut them. It seems that the expectations have an affect the pairs against the EUR and GBP. Anyways we hope for good news and wish you a nice day.
Market review
The EUR as well as the GBP are both down against the USD on Thursday. This might pressure the expectations that the European Central Bank and the Bank of England could cut interest rates. All the major central banks want to support their economies from further deduction. Especially the RBA - the c. bank - has slashed rates by 200 basis points in just two months. The AUD / USD currently trades around 0.6740, a little down from a day-high of 0.6847 but it is still over its 5.5-year low of 0.6676. This was touched at the end of October. The single Australian currency is expected to be stable in the following months. The long-term outlook however, is bearish on expectations of more rate cuts and weaker demand for the country’s commodities.
The JPY is up to a basket of higher-yielding currencies while the Nikkei makes huge losses over 7%. The USD / JPY falls about 0.2% to 97.75. The EUR / JPY currently trades at 125.81 down up to 0.8% while the GBP / JPY is at 154.78 from a high and opening of 156.49 down up to 1.1%. The AUD / JPY is also 2% down to 65.87 slipping from a day-high of 67.29.
AUD / JPY
Since the middle of September the AUD / JPY has been trading in a downward trend channel with a support line at 65. After touching the lower trend line twice the market has been recovered very strongly and trades currently between the upper trend line and the 65 support level. If the market breaks through the 65 support level we could assume a pullback to the lower trend line.
EUR / AUD
Since end of August the EUR / AUD has been trading in Fibonacci retrecement lines. After touching the 100% level for the third time the market went down and touched the 38% level for the first time. It has returned to the 50% level, which could give us a sign of an oversold market and a pullback up.
