Forex News – 6th October 2011


Chatter going around in the market of a potential rate cut in today’s ECB rate
announcement at 11:45am GMT. The rate is not expected to change
(currently at 1.50%).

The market was pricing a 72% chance of a 25 basis point cut in today’s announcement
although there is a chance of a 50bps cut. The IMF suggested to cut rates in the
euro-zone but as you know The ECB does not take orders from anyone, it will be
interesting to see what will happen.

EUR/USD is currently trading at $1.3330 as traders await the new interest rate and
the last press conference of Jean-Claude Trichet as ECB President.

Resistance noted at $13414, support at $1.3277.


The BOE will meet today at 11:00am GMT to vote over the interest rate and
restarting QE program. Though nothing is expected to change, Analysts stamp
a 43% chance of QE being restarted in today’s meeting and a 75% chance of QE
restarted in November if it will not be confirmed today.

Restarting the QE will have a huge impact on GBP against other currencies such
as GBP/USD, EUR/GBP, GBP/CHF etc. One would expect GBP to weaken although from
personal experience I would suggest being next to the computer at 11:00am GMT
and act in accordance to what
you see.

This is may very well turn into a very profitable opportunity should QE be
restarted today.

Resistance tipped at $1.5497, support at $1.5415.


Further gains in store.

Silver finally broke out its triangle, which should now be well-supported by
the tech traders.

The break outside the triangle may confirm further gains in the commodity,
targeting 33.47 in coming days.

A return back into the triangle defers this bullish view.

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