Forex market awaits interest rate decisions

There is a certain kind of calm in the forex market today, but this calm is just a deceptive facet. I’ve got more time away from the computer today than I had in the past few days when the currencies were moving in a frantic manner, but I know that the volatility dust is going to be kicked up again either tomorrow or on Friday. Again, people are guessing if this calm in the financial markets (including stock markets) would spell the end to the markets’ recent turmoil, or if it is a sign of a temporary break. Tomorrow we are going to hear from two central banks in Europe,…

whether they are going to raise interest rates in the UK and in the Eurozone.

The European Central Bank (ECB) is expected to raise its key lending rate to 3.75% from 3.50%, and Trichet’s press conference after the rate announcement will be of interest to traders. The Bank of England is expected to keep its rate steady at 5.25%.

Swissy (USD/CHF) and EUR/USD have been moving in relatively narrow trading ranges compared to Cable (GBP/USD) and USD/JPY. No significant support or resistance levels have been breached.

Swissy’s nearest resistance is still around 1.2260-70, then 1.2300-20. Support is around 1.2190, then 1.2140, then 1.2080-1.2100.

Daily chart of Swissy:

Cable has strong support at 1.9260, followed by 1.9230, then 1.9180. If that first support holds, it may rebound towards 1.9400-10 (which will be the first hurdle towards more gains above), then 1.9460.

USD/JPY’s nearest resistance is around 117.00, then 117.40. A fall below 116.20 is likely to open downside risk towards support at 115.15. Below here targets 114.45.

Thursday:

US Treasury Secretary Paulson speaks on financial markets 0330 GMT

Swiss consumer price index 0645 GMT

Japan Eco Watcher’s Survey 0700 GMT

UK BRC shop price index 1030 GMT

Bank of England announces rate decision 1200 GMT

European Central Bank announces rate decision 1245 GMT

ECB chief Trichet speaks at news conference 1330 GMT

View Forex Economic Calendar

Use Free Forex Charts

Got any questions about trading or just want to air your thoughts?

The Forex Vibes Forum is the place to do so!

You can post and comment on anything that is related to forex trading, start new topics, reply to existing threads, lend a hand to those who have questions, ask questions, or simply make some new friends who are in the trading scene.

Click here to go to Forex Vibes Forum.

I will see you there!

Posted in Categories: Eurozone, Forex, Japan, Switzerland, UK, USA.

Subscribe by RSS Subscribe by Email