Good morning from beautiful Hamburg. Today, the FOREX-market interest is directed towards the rate decision of the Bank of England and the European Central Bank. And we are still fraught on the speech of the Central Bank’s Chairman which may give us a forecast where the economy will go to.
Market review
On Wednesday the GBP gained versus the EUR and the USD after a poll showed that the U.K. consumer confidence rose in February from its lowest level in the least four years. The expectation of a rate cut by the BoE of about 50bps has affected the markets fewer than the aspiration that the BoE will signal to buy government bonds as a part of a so-called quantitative easing policy. The EUR/GBP closed at 0.8920 after its day-high was seen at 0.8950 and the GBP/USD increased 1.52 % from 1.3986 to 1.4199. According two consecutive days of gain, the EUR/JPY fell in the early Tokyo trading to 124.86 at its lowest point based on speculation that today a report may show that the European Union’s economy shrank the most in at least 13 years last quarter.
The AUD and NZD profit by China’s $585 bln stimulus plan which could raise demand for commodities, the major part of Australia and New Zealand exports. Admittedly the AUD must pared its gains after home-building approvals unexpectedly declined in January for the seventh month in a row, while broadly a gain of 1 % was expected.
Also the CAD benefits from rising commodity prices and climbed against the USD 1.95 % from 1.2967 at its high to 1.2714 at its low.
EUR/USD
On Wednesday the EUR/USD failed to cross its upper line of the bearish trend-channel, which persists since the end of February. If we have a closer look, we discover an Evening Star Candle Stick construction which is a indicator for a trend reversal and could boost the downward movement. Likewise a signal for further losses is maybe the Momenentum. In the last days it declined from a high and is currently arranged above the 100% level.
GBP/CHF
Since February 24th, the GBP/CHF has been trading close to a bearish trend-line. After the currency pair fell below its support-line at 1.6550 on March 2nd, it recovered shortly and crossed the support-line again. But the upward trend wasn’t strong enough to cross its overall bearish trend-line and decreased with a closing tail below its upward trendline. Now it seems to retest the main support at 1.6550. Should this line breach, it could boost the bearish movement.
