Forex trading headlines from the European morning session 7 August

The week’s main event fully lived up to expectations as Mark Carney’s BOE revealed their full detail on forward guidance, and the ensuing carnage was breathtaking in its speed.

The initial announcement that interest rates would not be hiked until unemployment falls to 7% send the pound tumbling with cable posting 1.5205 lows from 1.5290 in a rush sending EURGBP racing to 0.8732. As traders digested the rest of the package ( details above ) then the sell rumour/buy fact scenario kicked in and we saw traders grabbing back short positions with cable racing to 1.5400 where it retreated only to burst higher again through 1.5420 flying to 1.5493 before tumbling to 1.5450. EURGBP tested support around 0.8580 before rallying sharply to 0.8615.

Blink and you missed it and the story was the same across all GBP pairs. Crazy days indeed.

Elsewhere we’d seen strong selling of yen pairs as the Nikkei decline continued which had capped other major pairs despite a generally USD-negative tone prevailing. USDJPY fell to 96.77 EURJPY 128.56 and AUDJPY to 86.40 before all rallied in synch.

The yen buying drove EURUSD down to 1.3265 from 1.3310 and AUDUSD to 0.8919 from 0.8975. USDCHF got a lift to 0.9290 but all have reversed to differing degrees since.

Now we wait to see what the aftermath of the morning’s frenetic activity brings us. But it’s unlikely to be pretty.