Yesterday, the ECB left its main refinancing rate at 0.05% and the deposit rate on overnight bank deposits at minus 0.2%. As a result, the USD Index , which tracks the performance of the greenback versus a basket of major currencies, has finally declined. What impact did this move have on major currency pairs? Did it change their short-term outlook?

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While we usually cover individual currency pairs in our Forex Trading Alerts, today we decided to cover the thing that affects all of them – the USD Index. The rally in the US currency is something that has not only caused moves in world’s key currency pairs, but it has also impacted moves in the commodity markets (and that perhaps is responsible for the decline on the stock market). It’s important for investors and traders to keep monitoring the USD on a continuous basis.

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Earlier today, the Institute for Supply Management showed that its index of purchasing managers declined to 56.6, missing analysts expectations for a drop to 58.5 in September. As a result, the greenback gave up some gains and USD/JPY slipped below the recent highs. Will an invalidation of the breakout encourage currency bears to act?

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Earlier today, data showed that consumer price inflation in the euro zone fell to 0.3% in September from 0.4% in the previous month. Thanks to these disappointing numbers, the euro dropped to a two-year low against the U.S. dollar after and the EUR/USD slipped to the next support level. Will we finally see a rebound from here?

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On Friday, the Commerce Department reported that U.S. gross domestic product expanded at an annual rate of 4.6% in the second quarter, while GDP was initially reported to have increased by 4.2%. These positive numbers supported the greenback, which hit a fresh six year high against the yen. With this move, USD/JPY reached an important resistance. Will it be strong enough to encourage forex trader to push the sell button?

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