Tuesday, January 26, 2010 turned out to be quite news-rich and active trading day. Lots of market participants decided to get rid of high-yield currencies even during the Asian session, because the Central Bank of China allowed some banks to increase their exchange reserve and made the other to stop giving credits. At this rate many Forex people decided to invest into USD, which made the American currency grow.
At the same time the news from Europe were quite negative. For example the change of UK GDP in the latest quarter was only +0.1% instead of +0.4% predicted. That made the British pound fall down by about 150 pips. Due to that GBP/USD finished the trading. day at the level of 1.6149. EUR/USD was also to roll down pretty fast, although the IFO’s data on business climate was better than it had been predicted. So, EUR/USD went down to 1.4054.
Wednesday, January 27, 2010 can also become the day of USD. The American currency is likely to be supported by the news releases from the United States on new home sales and DOE US inventories. But the main news, which will be awaited by all market participants, is of course, FOMC decision about the interest rate. The rate is predicted to remain without changes, but if it’s changed, the market will be turned inside out in a moment. So, GBP/USD is likely to continue falling and reach the point of 1.6080. And EUR/USD might also roll down and even break through the important psychological point of 1.4000.
