On Wednesday, trading on the euro closed down and the British pound closed slightly up. There were some fluctuations in both directions on the pairs at 17:40 EET when an act of terrorism was committed in London. A car on Westminster bridge drove onto the pavement, hitting a number of pedestrians as it made its way to the parliament building. 5 people have been confirmed dead, including the assailant, who was shot by police, and another 40 were injured.
The pound slid to 1.2423 in the aftermath of the attack, while the EUR/GBP cross rose to 0.8700. On the back of euro purchases on the cross, the EUR/USD rate was able to renew the daily maximum at 1.0825. When the assailant was killed, the EUR/GBP cross fell, bringing the EUR/USD pair with it, which slid to 1.0790. The GBP/USD restored to 1.2490.
The euro/dollar has returned to the balance line. At the time of writing, the euro is trading at 1.0793. On the hourly timeframe, the technical picture is bullish, so in the first half of the day, I’m expecting to see the price restore to around 1.0820.
At the beginning of the European session, the ECB bulletin could affect the dynamics of the currency pair.
At 15:45 EET, Janet Yellen is set to speak. It’s currently unclear whether or not she plans to aid the weakening dollar after raising interest rates. She usually strikes a neutral tone, giving markets little sign of what is to come.
Day’s news (GMT+3):