After a lackluster morning, the EUR/USD and the GBP/USD both presented major movement, following the two awaited interest rate decisions.
 
The BOE took the stage first, coming out with an expected statement, holding its central rate at current levels. The BOE mentioned that it will leave its overnight rate at 0.5% and keep its quantitative easing program, which should take another month to complete.  Investors immediately took the news as a good sign and drove the GBP/USD higher. After a 70 pip rally the GBP/USD found support around the 1.6050, before heading again higher to touch an intraday high of 1.61128. From a larger perspective the GBP/USD has now bounced off its previous support line and is heading towards prior resistance of $1.6150

The ECB also had a major say in today’s session, sending the EUR/USD into mayhem.  Even though the Bank’s president, Trichet, hinted that the Euro-zone is slowly pulling out of its dire straits and that there are signs of stabilization, regarding inflation, Trichet emphasized on the importance of the U.S Dollar. The Bank’s president topped off his speech by confusing investors about the bank’s future efforts, stating that the ECB is in no rush to exit the markets.

Investors were bamboozled by the immediate reaction as the EUR/USD soared, before it dropped by over 100 pips. After presenting choppy trading, the EUR/USD found its trend and headed higher for the day, backed by the U.S stock market.

Looking forward, the rest of today’s session should be influenced by the U.S stock market. Japan is scheduled to release its Core Machinery Orders, but the data is known to have a low impact on the pairs.