This took place as the equity market retraced some of its recent declines ahead of the third-quarter gross domestic product numbers from the U.S., which are likely to have a strong influence in the financial market, especially in the foreign exchange arena.
Looking ahead, the market is likely to calm down ahead of the GDP numbers, but then start to get volatile as GDP numbers hit. Since the beginning of the current week, the vast majority of trading had been concentrated during the U.S. session and Thursday likely will follow the same pattern.
The euro (Eur/Usd 1.4755) retested the lows touched in late Wednesday trade during the overnight session, but since then the pair has headed only higher. On the daily chart, the euro is trading below the 20-day moving average but above the 50-day moving average. Ahead, the euro is expected to have a strong reaction to the U.S. GDP numbers, since investors use the GDP read to gauge the performances of the two economies.
The pound (Gbp/Usd 1.6430) continues to trade within the same upwards channel as in the last few trading sessions, even though the dollar index strengthened across the board. Traders should note that lately the pound has carried a negative correlation with the major pairs, something that might continue until the economic picture in the U.K. becomes clearer.
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