Good morning from beautiful and cold Hamburg. Having the ECB and BoE act as expected we can start in the last day of the week. We hope you have a prosperous trading day and wish you a nice weekend.
Market review
The GBP rose against a basket of major currencies on speculation that the Bank of England will pause in cutting borrowing costs after reducing the benchmark to a new all-time low at 1 percent. While the European counterparty, the ECB, kept its main refinancing rate unchanged at 2 percent after a row of four cuts since October. The EUR/USD dropped near a two-month low after the rate decision and fell to 1.2762 in early Tokyo trading.
After the rate decision of the ECB the USD/CHF climbed to the highest level since 15th of December to 1.1739. As well the GBP/CHF rose to a multi-day high at 1.7159. Against the JPY the USD released some of its yesterday gains on concern a government report will show the U.S. jobless rate rose to a 16-year high today. Also the JPY profited on speculations that the biggest drop against USD in seven weeks encouraged local exporters to bring home some of their overseas earnings. The EUR/CAD decreased yesterday from 1.5834 at its opening to 1.5693 at its low as some indicators suggested commodity prices may improve and renewing investor’s interest in the currencies of commodity-producing countries.
Australia’s central bank reduced its forecasts for economic growth and inflation. The gross domestic product will rise 0.25 % in the 12 months through June after a forecast from November said 1.5 percent.
EUR/USD
The EUR/USD has been trading close to a bearish trend-line since December 2008 and breached the psychological important level at 1.3000 for several times. It seems that the next substantial support will be at 1.2546. If the currency pair could recover it could be possible to cross the resistance at 1.3080.
GBP/JPY
After a serious loss in January the GBP/JPY dropped below 120.00. It recovered and trades in a bullish trend-channel since that time. On Thursday the currency pair crossed the important 130.90 resistance line and it seems to test its next resistance at 135.88. Potentially the old resistance at 130.90 will be a good support now. The Oscillator indicator shows a bullish field.
