Just a week after the Federal Reserve took part in a coordinated rate cut by lowering its benchmark lending rate 50 basis points to 1.50 percent, the markets are still forecasting another aggressive cut for the policy board’s next meeting on October 29th.
The US dollar ended the day lower versus most of the majors, though the bulk of the action came overnight in anticipation of the US government’s big recapitalization plan announcement. In fact, the greenback hardly budged during the NY trading session as the forex markets simply consolidated their larger moves.
1.3485 remains the key level for short term EURUSD bulls. If the larger pattern is bullish, then the pair should reach 1.40-1.42 in the next week.
The GBPJPY has fallen considerably since September to reach a low of 165.98 on 10/10, but has bounced higher over the past few days, and may offer profitable opportunities for forex traders.
U.S. retail sales are expected to have declined in September by 0.7% after a 0.3% drop the month prior. August saw a precipitous drop in gasoline receipts as consumers cut back on consumption due to elevated prices.