Market Review: Post ECB Major Pair Impact

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Market Review:

Post ECB Major Pair Impact

In the daily market review with TheLFB trade team, Dan Cook, Snr Market Analyst at IG Markets, looks at the impact of TheECB rate statement and press conference. Catch Dan, and TheLFB trade team on ForexTV Live.

EUR\/USD – The Euro has struggled to hold value throughout the European and into the US sessions. After once again bouncing off technical resistance in the area of 1.4560 it has been all USD. Not even positive Eurozone Industrial Production figures showing 1.0% growth could lift the Euro for long. The only brief strength shown for the continental currency was immediately following the European Central Bank decision to keep the Minimum Bid Rate unchanged at 1.00% and stay the course on enhanced credit support measures. 

The comments from Mr. Trichet regarding the rate decision followed about 45 minutes after the announcement and judging by the price action in this pair, the market did not feel his statements were Euro friendly.  So far though, this pair looks content to stay mired in the trading range that developed earlier this week between 1.4450 and 1.4580.

GBP\/USD – Through the London trading session Sterling dropped versus the US Dollar as it looked like a short term top may have been put in for this pair around the 1.6300 level. After dropping to 1.6250 though, the Pound found some footing and starting pressing upward trying to make another run at the previous weekly high.

The move up in Sterling was supported by very dismal US Retail Sales figures which showed that Retail Sales in the US fell by 0.3% and Core Retail Sales fell by 0.2%. This was really not good news for a US economy that seemed very hopeful that holiday purchasing would support the retail trade. Unfortunately though, it appears that US shoppers, driven by inventory concerns, completed most of their purchases in November.

USD\/JPY – After gaining ground steadily against the Yen since midday Tuesday, the Dollar turned this morning and changed course in rapid fashion. There were no major fundamental announcements out of Japan overnight; however, investors must have considered the area around 92.00 as the point where they favored holding the Yen over the dollar.

Sliding steadily during the European and UK trading sessions, the US Dollar took an absolute headlong dive against the Yen after the extremely disappointing US Retail Sales figures were released. Not at all helping the case for US Dollar strength, Initial Unemployment Claims in the US did come out worse than expected at 444K.