Good morning from wonderful Hamburg. Next to the G20 summit in London, the rate decision of the ECB and the following statement of the President of the ECB quicken the interest for the FOREX market. Most economists expect a rate cut of 50bps to 1 %. However, we wish you a successful trading day.
Market review
The EUR fell against 12 of the 16 major currencies on prospects that the European policy makers will reduce the benchmark lending rate to the lowest in at least a decade. Based on speculation that the President of the ECB, Jean-Claude Trichet, will prepare the market in his speech today, the ECB will fade to a quantitative easing policy as its U.S. counterparty. Yesterday the USD rose near to a two-week high versus the EUR. Today in London the leader of the G20 will deliberate about a common regulatory framework to rein in hedge funds, derivates trading, executive pay and risk-taking by financial firms. “All of us here in London have the responsibility to act with a sense of urgency” U.S. President Barack Obama said.
The NZD/USD declined 0.72 % as New Zealand’s Finance Minister Bill English said, “A stronger currency would make it difficult for the nation to snap out of its worst recession in more than three decades.” Therefore, further rate cuts in New Zealand getting more supposable whereby the AUD/USD rose 0.5 % in the early Thursday trading session.
GBP/AUD
The GBP/AUD has been trading in a bearish trend-channel since the beginning of March. During this time it touched two times the upper trend-line. Foregone was to negotiate the middle-line of Andrews’ Pitchfork, but as its third attempt to leave its downward trend, the currency pair already stopped the movement at the upper Pitchfork line. This could be an indicator of a boosting bearish trend.
GBP/CAD
Yesterday the currency pair broke through its resistance level at 1.8054 and rose to a multi-week high. At the peak the candle stick closed with a hanging man and simultaneous the RSI Indicator rose over the 70 point level which shows a strong overbought market. The hanging man and the RSI could suggest a trend reversal.
