Yesterday had traders buying risk as the European debt crisis took a backseat with equities and crude oil rallying. Those expecting a euro recovery will be following ECB President Trichet when he speaks following the ECB interest rate announcement. Some traders are looking for an increase in bond purchases by the ECB which would be euro positive.
Today’s Market Events:
EUR – Minimum Bid Rate – 12:45 GMT
Expectations: 1.00%. Previous: 1.00%.
No change expected here. Traders will be watching Trichet’s accompanying speech.
EUR – ECB Press Conference – 13:30 GMT
ECB President Jean-Claude Trichet is due to explain ECB monetary policy. He will surely address the European debt crisis as well. Speculations are for an announcement of an ECB bond buying program. Should this occur it should be a positive for both the euro and equities.
USD – Weekly Unemployment Change
Expectations: 425k Previous: 407k.
If yesterday’s positive payrolls data is any indication of what today’s weekly data will turn out then traders should expect a surprise to the upside.
Support and resistance for the EUR/USD come in at 1.2960 and 1.3310.
The daily chart shows the AUD/USD tested but failed to breach the daily chart’s bullish trend that begins in early June of this year. This may be a good spot for traders to go long with a protective stop underneath the trend line.
Tuesday’s gold trading ended with a shaved head candlestick which signals potential bullishness in the commodity. This is in contrast to the head and shoulders pattern that appears on the daily chart. The chart pattern signals a potential reversal. Forex traders should remain long on gold until a close below the neckline signals confirmation of the head and shoulders pattern.
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Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
