Canadian dollar holds ahead of CPI

No major news remains for the remaining of the week. Yes, Ben Bernanke is going to present his semiannual financial policy to the Senate today, but he did this in front of the House yesterday, so I do not expect anything drastic to happen. Traders might send the greenback lower just to make extra profits for the end of the week and let gbp/usd reach 1.5300 and eur/usd 1.3300 levels, but that is not for sure. The nearest resistance for eur/usd is 1.3130 and for gbp/usd 1.5250. Intermediate trend for European currencies remains upwards and for US dollar downwards. 

One event that is of interest for currency traders should be Canadian Consumer Price Index coming tomorrow at 12:30 GMT. You never know which direction will ‘the loonie’ go, but there is a clear technical bearish bias for the currency. Although fundamental expectations are bullish and traders might position for such news tomorrow you should always remember the axiom ‘buy the rumor and sell the fact’. In my opinion current expectations of economists are too optimistic and Canadian dollar might fall if those expectations are not fulfilled. In the meantime (today and till the release) Canadian dollar will probably rise moderately. Get ready for this risk event.

Federal Market Committee outcome: dollar rises

Forex news from Federal Market Committee did have significant impact yesterday. Dollar regained almost half that it lost in a matter of a few trading sessions. FED gave a very clear signal that it will end this stimulation program quite soon. No wonder stocks fell, gold and silver collapsed and dollar rose. Technically it was all clear: Pound and Euro had already made to their resistance. 

One thing is not sure and that is what would be to the downtrend in Japanese Yen. It looks like it is not over yet. Various Yen pairs are taking out their resistance level, which means that Japanese Yen will continue falling. If the momentum does not stop here we are going to see new lows in eur/usd, gbp/usd and new highs in usd/jpy pairs. 

Tomorrow Canada CPI is released. That should set the tone for Canadian dollar pairs for the upcoming week.

Interest rate decision from EU and GB

The big day has finally come. Two central banks announce their interest rate decisions. One is ECB and another is BOE. We have already seen positioning taking place as Pound has been rallying for hours before the event takes place. I am worried that we would not see 'buy the rumor and sell the fact' situation. Current market sentiment is clear. Everybody expects hawkish statements from the Bank of England and maybe neutral from ECB.

I am bullish towards Pound and think it can go to 1.5700 level. I mean gbp/usd pair. Previous double bottom in the pair confirms that. On the other hand, the currency pair is right at resistance and whether it is going to be broken or not remains to be seen. It is possible that traders will wait for Non-farm payrolls tomorrow and only then take firm actions.

Now, what about Euro? Not clear, because most recent data from Euro zone was not very optimistic. So, we are running a risk of hearing pretty dovish comments from ECB president. At the moment I am bullish in Pound and bearish in Euro. Let us wait for a few hours to see the outcome. Be sure to wait till the ECB president Draghi speaks at the conference at 12:30 GMT. I will write an update on all the stuff tomorrow.

Purchasing Manager Index pushes Pound up

There has been some Forex data of intermediate importance during European session and the one that particularly influenced moves in fx market was GBP Purchasing Manager Index. It made British Pound run up across the board. The data came out better than expected and this gives extra bullishness for the cable before key event on Thursday when the Bank of England releases its' interest rate decision. This strength may continue in eur/gbp and gbp/jpy. I currently am in both of the pairs. gbp/usd will probably hit resistance at 1.5300 level and only Thursday will determine where the pair will go.