EURUSD trading at 1.3 ahead of tomorrow’s rate decision

Wed, Nov 5, 2008

Obama’s victory yesterday was most expected by the markets, maybe this is the reason why wall-street did not share the same joy and excitement displayed in the streets of New-York and Chicago. At least not at the opening bell of the NYSE.

The dollar did trade lower against most major currenciesÂ today, EURUSD crossed above the 1.3 psychological resistance areaÂ fueled byÂ a fundamental reportÂ showing that non-manufacturing industries shrank in October at the fastest pace on record. ( 44.4 while the forecast was 47.3)

{ the ISM Nom manufacturing PMI is a Survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories}

Traders eyes are now set towardsÂ the European Central Bank which tomorrow will make an interest rate announcement.
It is widely expected that the ECB will lower the benchmark interest rate by 50bp to 3.25% from 3.75%.

The announcement is expected at 12:45 GMT (Nov 6)
Of course any surprise might create a significant reaction in the Forex market.
The first resistance area of EURUSD is at 1.3260 and the first support area is at 1.2720.

The USDJPY is trading around 99 after it reached 100.5 yesterday, possibly now retracing for a natural correction of its advance from around 90 on late October.
The most important support area is at 98.2, a clear break bellow might trigger a dipper correction to around 97.