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Expected News is Good News for Greenback
The US Dollar rallied even though US employment data shows continued weakness. The data could have been worse. Meanwhile, the ECB had no major surprise with it’s rate hike, and the accompanying statement had a “neutral” bias. There was a quick spike, and “Sell the News” seems to have been applied - at least temporarily.
Trichet Has No Bias - Maintains Credibility
Unlike his US counterparts - Jean Claude Trichet maintained his credibility by doing what he had said he would do. Having followed through with this rate increase, it appears as if a cruising altitude may be in place. During his press conference Trichet stated that, ” Starting from here I have no bias.” indeed the ECB did not make any mention of future intentions.
Bank of England is Up Next Week
Normally the BOE Interest Rate would have been announced today - However, the UK shifted the announcement date to next Thursday July 10th, to allow for it’s former colonies Independence Day celebration.
Pound Holding at Support
4 Hour Chart - Nice Trend Channel Holding Support (click to enlarge)
30 Minute Chart shows an Inverse Head & Shoulders pattern that has failed, as the Non Farm payroll, and ECB statement was released at 8:30am EDT. This resulted in a 100 pip drop, quickly completing the failure of the pattern - that results in a “Double Bottom”.
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Jerry Furst is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.