Can someone shed some light on the significant upward hike at 12.00 in the EURUSD pair please?
I’m still only demo trading and didn’t actually have a position at this time due to being extremely busy at work but it would be really appreciated if someone could help me understand why the joke occurred for future preference,
Thanks
Maybe you are talking about Cable at 12.00 gmt, jumped 35-40 pips on the BOE announcement re interest rates and qe
The news as per BBC is released at 12.00GMT
BBC News - UK interest rates remain on hold
EU went up from the 13:00 candle. Think it was reaction to Draghi not saying “Listen, why don’t we just forget about interest rates for a little while?”
[QUOTE=“peterma;599225”]Maybe you are talking about Cable at 12.00 gmt, jumped 35-40 pips on the BOE announcement re interest rates and qe The news as per BBC is released at 12.00GMT BBC News - UK interest rates remain on hold[/QUOTE]
But there was no change in the UK interest, furthermore this is what was expected so the jump baffled me slightly.
Unless of course it was off the back of some poor euro zone data or announcement…
I think it was a general reaction to Draghi’s less-dovish-than-usual remarks. Although he said that rates are likely to stay low in the mean time, he talked about better credit conditions. Other ECB officials also tried to dismiss the likelihood of deflation.
Corriston, I suspect you are def speaking re GBP/USD (cable) and not EUR/USD as per your post.
Your question is a good one, one that I have contemplated many times in my learning curve. The answer, for me that is -remember I too am a learner - is summed up by: Certainity vs Expectancy.
The market dislikes uncertainity and consequently uncertainity has a discount reflected in the price of an asset.
The second that the uncertainity is removed so then is the discount, the less the uncertainity then the less the discount.
In sterling’s case yesterday the level of uncertainity was quite low (unlike NFP today) so the ‘jump’ in price was low in comparison to recent news releases for other currencies.
Therefore, should NFP hit the expected number today I would hope to see a consequent jump in USD.
Remember, just my understanding only