The major currencies which are trading against the dollar suffered a serious setback on Wednesday due to various reasons.
The U.S. currency managed to recover especially against the euro, which fell from 1.3305, the value reached in the European session yesterday. It is encouraged by a good German IFO report. However, the single currency failed to hold (and appeared very overbought anyway), and fell over 120 points, breaking a trendline technically bullish short-term, that could lead to a sharper decline in the EUR/USD pair during the next few hours.
Meanwhile, as the imminence of retail inflation is very low, the pound also backs against the dollar right now, although more attenuated than the euro.
The yen gained strength, going against European currencies; the Bank of Japan announced its inflation target at 1%, one percentage point below the aspirations of the new Japanese Prime Minister, S. Abe.
Also the Wall Street stocks fell on Wednesday, on a day which obviously took gain market rallies in recent days. We believe this correction, can be extended to the general session on Thursday.
The data to follow during the American session is Weekly unemployment claims, at 8:30 Eastern, with the end of the third quarter GDP. At 10:00, meanwhile, will be released existing home sales index and the Philadelphia Fed.
The material has been provided by Instaforex Company - instaforex.com
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