[Piphacker]

Originally Posted by Andrewunknown

Hey there Babysteps,
I'm not Piphacker, but saw your comment and thought I might throw in my two pips:

The wider market was overshadowed on 05/08 by three events:

1) The European Central Banks's (ECB) rate decision
2) the Bank of England's (BoE) rate decision
3) ECB President Trichet's speech

EUR/USD tested a briefly broke a couple of important short-term levels (which you can see on the 1 hour chart attached) last night leaving the pair hovering around 1.53, but events 1 and 3 this morning, basically generating familiar bullish sentiment by indicating the Euro zone is in decent shape and that inflation is still the ECB's major concern despite the present "turmoil in financial markets".

That bounced EUR/USD back to just above 1.54, where price found minor resistance yesterday in a slight upward move before it took the dive to 1.53. Today's London session (when these events occurred) was lively for the EUR/USD, but New York after lunch and now Tokyo have been pretty sleepy.

Abrupt movement's typically accompany these events, especially if there is a rate change that is more or less than the market anticipates, or if the accompanying statement from the Central Bank indicates the sentiment about the currency or economy has shifted. Before the announcements, and depending on what happens, after the announcements, price can behave irrationally (well, more irrationally than usual).

Hopefully that helps somehow and didn't seem too simplistic.

Andrewunknown

Thank's for your this post ...
PipHacker!!!