News can push European currencies lower

A few releases from Europe are scheduled today. From technical point of view all European currencies look extremely vulnerable, particularly against commodity currencies: NZD, AUD and CAD. Swiss Franc has already broken key supports in these pairs and is rapidly going down. Other crosses, such as eur/nzd and gbp/nzd as well as eur/aud and gbp/aud are threatening to break down any time now. What could trigger their fall?

IMF global economic outlook may trigger a sell-off in Euro and NIESR Gross Domestic Product Estimate may break the British Pound. Pound has already been hit by poor economic data today and is likely to continue going down. This is confirmed by both fundamental and technical factors. Euro is in a slightly better position, but the situation may change any time now. One of the greatest events that could turn everything around is tomorrow’s FED minutes from last month coming at 18:00 GMT, followed by FED’s Ben Bernanke speech at 20:10 GMT. 

Pound pairs should be sold on rallies. US dollar still remains the strongest currency for the time being and should be bought on dips. The fate of commodity currencies will be decided upon on Wednesday night when data from Australia is released. See you then.

GDP release breaks British Pound

I did not mark today’s Great Britain release on its’ Gross Domestic Product by mistake. You see I follow dailyfx calendar and they have statistics on which release has the highest impact on markets. I usually skip those that are of medium importance. However, it turned out that they marked today’s release as of medium importance and this fooled me. I actually had a long in gbp/chf from yesterday, which was not out right when the news hit the wire. It’s no wonder that Pound fell across the board. 

Open 15 minute charts in various British Pound pairs to see what happened. I follow 7 Pound denominated pairs and I can clearly see that ‘the cable’ (British Pound) was beaten in all of them. The biggest drop was probably in gbp/jpy. It collapsed around 70 pips. The second best pair to trade the news would have been eur/gbp, which has much higher pip value than most other pairs. It is not very volatile, but today its’ behavior was extraordinary. It rose around 40 pips, which would probably be equal to gbp/jpy fall or even worse. I am still positive on some Pound pairs, but they have to clear their technical resistance levels before real bullish price action is confirmed. 

I will expand more on this in tomorrow’s update.