In the week that the European Central Bank considers its next interest rate move, the latest data give the policymakers little cause to adjust the cost of borrowing. Euro zone inflation pressures are easing slightly, helped by lower oil prices, but falling investment and less spending by individuals led to the first ever quarterly contraction in the region’s economy between April and June.

Year on year, economic growth in the 15 countries using the euro was at 2.6% in the third quarter of last year, just 2.1% at the end of 2007 and the start of this year and down to 1.4% in the second quarter of 2008. Against that backdrop, the foreign exchange value of the euro is coming under further pressure.

For the first time since January, one euro has been worth less than $1.44 as the US currency soared to an 11-month high against a basket of major currencies. The British pound is in an even worse state, down against the dollar and the euro. ECB President Jean Claude Trichet and his colleagues are expected to leave interest rates unchanged at 4.25%.

euronews.net

 
GBPCHF. Pair has broken lower border of the 2.0074-2.0842 range and has reached the support zone on the daily chart. If you took advantage of recommendation and opened a short position on the penetration of 2.0074 level, then it's time to take care of fixing profit. Look to get short in the gap zone (1.9902-2.0055), eliminate the transaction if the pair will close a day above of the 2.0055 level.

 
GBPJPY. Daily chart. A week opened with a gap and pair has reached a support zone. The gap signs that the trend becomes stronger than before. You should looking for open positions in the direction of the gap. Look to get short in the 196.23-198.14 zone, eliminate the transaction if the pair will close a day above than 198.14. Look to get long if the day will close above of the high this day then. Put stop-loss order in this case below than low of that day.

 
GOLD. Gold is making correction after strong falling on the daily chart. It is in the 787.10-835.90 range. Look to get short from the upper border of the range (835.90). Look to get long from the lower border of the range (787.10). Eliminate the transactions if gold close a day outside of the range. You can also try to open positions on the penetration of the range’s borders. In this case put sell-stop order below the lower border of the range, put buy-stop order above upper border of the range. Eliminate the transactions if the pair will close a day inside of the range after breakthrough.

 
Elena Chernaya, Chief Currency Strategist
ELAN Investment Solutions

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