The US stock markets have recovered yesterday as index gained over 1%. The Fed’s interest rate remained unchanged and Bernanke’s speech encouraged the investors to buy stocks again. The investors will look forward for the ECB press conference later today, and the European bid rate, which is expected to remain unchanged as well.
All of the majors US indices have a gap from above that was opened on Tuesday. If they break through the 2-days high, they will penetrate the gap and move towards its closing levels. In the S&P 500, the gap was opened at 1260 and that means it has about 20-25 points to rise in order to close that gap.
EUR/USD
Today’s main event is Tirchet’s speech regarding the recent developments in the European economy, especially the bailout plan issue. If the ECP president admits the truth and says that the bailout plan is not the answer for all of the problems, then the panics might take over again. Traders who like to trade during such important news, have to keep in mind that the market tends to get volatile during the moments of the event.
On the technical aspect, it is impossible to predict how the will react and therefore one should get prepared for any scenario. In this case, a break-up of yesterday’s high at 1.383 might launch the Euro up to 1.40. On the other hand, a strong break-down of 1.365 might send it to 1.35 and below.
AUD/USD
The USD is mainly influenced by Wall Street and the correction there yesterday weakened it. That gave the AUD an opportunity to rise for a bit, but the pair closed on its opening levels at the end of the day. The 200 SMA has been alternately supporting or resisting the pair, and now its role is to resist it. The pair could not break-it through yesterday and started falling when it got to resisting levels. Eventually, the Aussie found the support of the 50 EMA at 1.028, but if it breaks the support down, the pair might slide to 1.01.
EUR/AUD
The Australian dollar has been strengthening against the USD for two years until the beginning of 2011. The pair has been stamping during the current year and it is pretty close to its opening levels. However, the weekly chart shows that the pair is moving in a wide-range channel and every time the pair touches the one of the channel’s boundaries, it turns over towards the other boundary and starts a movement of hundreds of pips. It is possible, for experienced traders only, to try to take the pair up when it reaches the lower boundary around 1.29. If the current pattern remains, the pair might rise to 1.40 within a few weeks.
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