No surprises from Central Banks

ECB and BOE delivered their rate decisions yesterday and market wasn't surprised by the results. There was some suspicion as to whether European Central Bank would cut interest rate or not, but as we see they did not do it. Furthermore, the sentiment was that Draghi will speak in dovish tone and he did not. So, eur/usd rallied immensely and so did gbp/usd.

If you look at price action today you see sharp corrections taking place. gbp/usd is down by more than 100 pips and eur/usd about 75. And commodities lost almost everything they have gained.

Today is no less important day than it was yesterday. We have job data coming from both Canada and United States. So, you should not be surprised by consolidations taking place in both the greenback and the loonie. Let's see what today brings.

Bullish fundamental facts from Europe

ECB expressed its’ ‘sincere’ desire to address the European crisis and is again willing to do anything it takes to stabilize the region’ economy. These comments after interest rates announcements are very important as they usually give momentum for currencies at least for a few weeks. These are periods of time when a trader can accumulate a big position in a currency that is about to strengthen and keep it for a few weeks to make nice profits. That is exactly what happened in eur/usd or eur/jpy pairs. These macroeconomic news put Euro back on its’ uptrend and this tendency of Euro strength may continue for a few weeks.

I will repeat myself again that one should only trade in the direction of the main trend and never against it. So, after ECB and BOE announcements of interest rates have been made one can expect Yen and US dollar to weaken and Euro, Pound and commodity currencies to strengthen. Just be sure not to risk too much, nor to overtrade. These things never increase your profits. Vice versa, it impedes you to take the best possible trades that are on the table. Stay patient and try adding to your position on dips.