Officials know at which price levels to make an announcement so as to break up a pattern and cancel out a bullish signal. If the price itself doesn’t disappoint, it becomes targeted by verbal intervention from central bank representatives.
Despite the ten-day growth on the euro/dollar, Ewald Nowotny tried to bring a halt to the strengthening of the euro near 1.15. He announced that the ECB needs to undertake additional measures to aid inflation growth.
Do you not think it strange that he is supposing that additional measures should be undertaken as the ECB are due to convene on 22nd October? Perhaps it’s a signal to those around him so that they put their money on the USD until then?
The euro/dollar is down from a 1.1494 maximum to 1.1425. The price is at the balance point near the trend line on the hourly. The UK pound has received support from the euro in the euro/pound cross. At 14:15 the GBPUSD was trading around 1.5484.
The tone for the dollar will further be set by US statistics. Weak data will cause a new wave of dollar sales.
Today the States is publishing CPI data for September, along with the industrial activity index from the New York Fed for October and the number of initial unemployment benefit applications. At 17:30, the FOMC’s Dudley and Bullard will speak.