U.S Senate passed Bailout plan – all eyes on ECB

Thursday 9:00am GMT

Yesterday, after the American Senate finally passed the $700 billion bailout plan, the dollar gained considerably against most major pair.
EURUSD is already trading well below the major support area of 1.4.

Since the bailout plan is a reaction of the U,S government to the current crisis – the market considers it to be a positive factor on the dollar.

Today we have the ECB ( European Central Bank)  press conference at 12:30pm

where all eyes will be set on the President of the ECB Jean-Claude Trichet.
although, the market expects the ECB to maintain its target interest rates on 4.25% today, traders will mainly try to find out whether there is any change in the ECB’s hawkish stance so far.

Any sign or remark from Trichet’s side to the severity of the situation, could signal the change in the ECB’s rate policy ( signal rate cuts in the near future) thus will trigger some more EUR selling.
While concentrating on inflation risk would be considered as bullish for the EUR.

Take into account that after a clear break under 1.4  the next major support area for EURUSD is 1.3660.

If the fundamentals will not change considerably while this pair will reach that level, it might supply a temporary break to the EURUSD’s fall.

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