FOREX NEWS: A CRUCIAL DAY FOR THE SHARED CURRENCY: ECB EXPECTED TO CUT THE INTEREST RATE
EUR/USDForex News: The market lacked direction yesterday on the back of mixed economic data released by the United States and as a result neither 1.3650 nor 1.3585 was broken. Trading was difficult on the lower time frames and a lot of direction changes took place.
Technical OutlookIndecision still governs the pair�s movement and market participants are holding back, waiting for today�s ECB decision regarding the Interest Rate. The major levels to watch are 1.3650 as resistance and 1.3560 as support, followed by 1.3480. Today�s direction will be highly affected by the event mentioned above and the technical side of the market will be secondary.
Fundamental OutlookWithout a doubt the day�s main event is the ECB interest rate decision which is scheduled at 11:45 am GMT and the Press Conference that follows 45 minutes later. The rate is expected to drop from 0.25% to 0.10%, a fact which will most likely be perceived as bearish for the single currency and will generate a huge fall. During the Press Conference, Mario Draghi�s attitude will be closely watched by market participants and his answers to the journalists� questions will most likely trigger additional movement.
GBP/USDUnited Kingdom�s Services PMI released yesterday showed a value very close to analysts� forecast but the impact favored the bulls who managed to reverse a previous drop and to take the pair into 1.6750 once more.
Technical OutlookIf the pair is going to continue the ranging movement, we are likely to see another bearish move which will encounter support at 1.6700 and at 1.6680. Yesterday�s break above 1.6750 couldn�t be continued by bulls so neither side of the market is in clear control. Today�s fundamental scene will play a very important role and will overshadow the technical aspect.
Fundamental OutlookAt 11:00 am GMT the Bank of England will announce their Interest Rate but no change is expected from the current 0.50%. A surprise change is not likely and this means that volatility will be increased just briefly. However, whipsaws can occur so we recommend caution if trading at the time.
This post has been edited by GDMFX: Jun 5 2014, 12:02 PM