EURO and GBP vs. DOLLAR

The largest and most influential central banks in Europe tomorow will face market pressure for additional support: QE made in Europe. Bluff Draghi has done whatever possible and succed toinverse, temporarily, the downward trend of the European currency against the dollar to 1.20 to 1.40.

ECB will not move in this session, but it may surprise the market and would be a favorable time. The main weapon is not a central bank interest rate cut, but the ability to change the vision and future market expectations. Draghi may be neutral repeating the words in previous meetings, posponing the payday which would be good for  Euro on the short-term, but the economy, despite optimistic Retail Sales, continues to struggle in recession with unemployment rate setting negative records.

Euro decline indicates a dovish Draghi, an advocate of continued policy of relaxation in an attempt to lower long-term interest. Euro could breake decisive minimum of 1.30. However,  meeting could not change direction or medium term, but short term. So, the outlook remains bearish with minor correction options. Tomorrow's NFP may have a greater influence.

BOE meeting today is likely more interesting than  Draghi's, being the first for the new Governor Carney (eg BOC - Bank of Canada), who takes over from M.King. They will announce their intention to revive the British economy, but more QE may face opposition from the members. It remains to be seen whether President BOE will resist the temptation to add support for the economy in the first session (positive for pound) or play aggressively from the start (negative for pound). Like the EURUSD, GBPUSD is in a downtrend that can not be changed regardless the monetary policy meeting decisions. The only question is whether it will continue counter-trend started yesterday or ending it, leaving space between its maximum and the preceding minimum of 24 June (signal rapid decline).