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Overall, the currency market continued to move side-ways during the Asian and the European sessions, ahead of two very important interest rate decisions. Most market participants agree that the major pairs will begin trending again once the BoE and the ECB releases are out of the way, something that could help the forex market break above or below the range seen during the last few trading sessions. Going forward, the U.S. session is likely to be volatile.
The euro (EUR/USD) followed the same pattern as in the last few trading sessions, swinging around the neutral pivot point (1.4400) area. However, this is likely to change as the market heads towards the interest rate decisions coming from ECB and BoE. In addition, Mr. Trichet’s speech could create a huge amount of volatility, pushing the euro out of its range after 3 days of hesitantly moving in a tight channel.
The pound (GBP/USD) moved sideways during the overnight session, as investors prepared for the BoE interest rate decision, and more importantly for the bank’s interest rate statement. Traders will be closely listening for any references made about the asset-buying program, which many say is likely to be shut down, as the U.K. economy shows signs of stabilization.
The aussie (AUD/USD) did a whole lot of nothing throughout the first part of the day on Thursday, as the pair bounced between the neutral pivot point (0.8405) and TheLFB R1 (0.8450). Moreover, the pair lacked a direction during the previous three days of trading; something that may suggest that the aussie’s current rally is unsustainable.
The cad (USD/CAD) saw very thin momentum during the Asian and U.S. trading hours, something that has been happening rather often. Since the Asian session started, the pair continued to move side-ways in 20 pips swings, but is likely to change as the market heads into the U.S. open. To the downside, the next important support area is 1.0630.
The swissy (USD/CHF) showed a lot of volatility during the overnight session, while still trading in a very small range of only 30 pips. In the short term, the pair has to break free from the 1.058-1.0650 area, two areas that has held the pair over the last few trading sessions.
The yen (USD/JPY) is heading once again towards the 95.40 area, the same place where the pair topped over the last few trading sessions. Since Thursday’s session begun, the yen picked up 50 pips, moving higher during the Asian and the European sessions.
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