As I wrote yesterday, it is far more important to
pay attention to what key financial people (like Ben Bernanke or Mr. Draghi)
say during press conferences than what they present on paper. Yesterday was a
clear example of that. When FED meeting minutes from June were released nothing
really happened. US dollar went down slightly, but recovered in fifteen minute
time. However, very strong pressure for the US dollar came when the FED chief
Ben Bernanke started delivering a speech at a press conference. That’s when
dollar plummeted. In some pairs it lost over three hundred pips in less than
twenty four hours.
This suggests that the downtrend in the greenback
may continue till the end of the week. For the time being Euro remains one of
the strongest pairs and should be bought on tips till other important Forex
news data is released that could revert its’ trend. The Bank of Japan governor
Kuroda also slightly surprised the markets by saying that the Central Bank of
Japan may not increase its’ stimulus. It indicates that Japanese Yen may finish
its’ downtrend and start going up very soon. Although fundamental data from
Europe is not very encouraging, Euro still has potential to go beyond its’
recent highs of 1.3400.
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