Thursday, 10 Sep 2009

British Rate Decision Dominates Trading

The volatility in the forex was very high before and after the British rate decision. British Interest Rates were kept the same at 0.5%, as virtually all analysts forecasted. However, the affect this had on the EUR/GBP pair has been substantial. Since the news was released the cross has fallen over 40 pips and now stands at 0.8774. This is very important as it was bullish prior to the news event. The reason for this behavior may be that now that most economists are practically certain that Britain is rising very quickly out of recession, and there may be a bullish correction for the Pound against the other major currencies too.

Looking ahead to 12:30 GMT, there is plenty of economic news that is likely to lead to another volatile run for the major crosses in the forex market. At 12:30 GMT, there will be 3 major releases. These include the Canadian Trade Balance, the U.S. Trade Balance, and the U.S. Unemployment Claims. These are the main events for today, and are set to determine the strength of the main crosses. Therefore, it is advised that you open positions in the major pairs now. Moreover, buying into the main commodities, such as Gold, Crude Oil, and Silver may bring you large returns today.

USD/CHF Reversal in the Making

Attention, I recommend you look at the graph for the USD/CHF 1-day chart now. The following chart shows that the downward trend for the cross might be coming to an end, and that a bullish reversal is coming up. Point 1: The cross is currently below the lower border of the Bollinger Bands, and that the next movement may be in an upward direction. Point 2: The Relative Strength Index (RSI) indicates that the cross floats sits in the oversold territory, signaling upward pressure.