The Euro is roaming in the range of a gradual decline, but at the moment there is no reversal or correction. This is a result of sales numbers while the market awaits the results of the 2-day FRS meeting. The focus of the market shifted to the meeting of the FRS, which will end on Wednesday. Anticipation of results is quite reserved; nevertheless, investors cannot help but pay attention to such event.
This time there is no direct communication planned for Bernanke to meet with journalists and economists. The release of a final statement is scheduled, where the Fed will announce everything that it intends to deliver to the capital markets.
Preliminarily, the text of the document will mention the October government shutdown which reflected negatively on the GDP of the state in the fourth quarter. However, investors are more interested in clues about the QE3, its volumes and terms of operating. T monthly volume of investment injected into the economy by the purchase and exchanging of governmental bonds constitutes $85 billion. The program does not have a rigid framework, but in May of the current year FRS Chairman Bernanke emphasized during his speech, that in autumn he would be ready to reduce its volume.
The market has been waiting for a reduction ever since. The summer has passed as did the September meeting as well with no changes made to the QE3 level. All eyes now turn towards the FRS meeting in December, where there will be crucial comments made and time frames of the program announced.
The pair is in the correctional phase. The range is in between 1.3650 and 1.3850. The precise middle of that range serves as resistance on the upside. Results of the FOMC meeting will either lift the rate up to 1.4000 or downgrade it to 1.3500.
The pair has broken an important level at 98. After a strong move the pair catches its breath consolidating within the narrow range, which suggests approaching resumption of the prior trend. So bulls are looking forward to see the break above 99 or even 100.
The Pound is moving downwards after yesterday’s dip. It is getting close to the lower boundary of 1.6020, while the upper one at 1.6260 is left far above. A fall below the lower line can push the rate in the direction of 1.5890, which is an essential support for the pair.