The rate decisions have come and gone, with both the ECB and BOE cutting their rates by the 50bps expected. The prospect of more easing to come made the euro and pound weak once again, with both currencies printing new daily lows as an aftermath! Traders now speculate that both banks may proceed in more cuts over the course of the coming months and that is weighing on investors€™ minds regarding the euro and pound's short term outlook

The EUR/USD was traded heavily today, mostly on the downside and traders took every re-tracement above 1.2530 as a cue to sell the euro even further. The ECB rate decision and the prospect of further cuts due to the deteriorating euro zone economy is making everyone reluctant to hold on to long euro positions! For now, the next level to watch is 1.2450 and if that gives way, further downside may be possible. On the upside, the pair may find resistance at 1.2570 and if the move is not strong enough to take out the level, euro bears may win once again.

Today the economic calendar had a few economic releases, with Housing prices out of UK showing lower numbers once again and also jobless claims out of US exceeding 630.000, giving traders more fuel to speculation the non-farm payroll and unemployment may come out very negative. The dollar appreciated due to risk aversion and stocks are already trading lower after the New York opening as confidence is again negative. The current market environment is very fragile and due to renewed worries regarding the global economic outlook, investors are quickly exiting any risky trades from fear of getting caught in the next day€™s market collapse!

The rate decisions provided us with more proof the banks are living in desperate times and therefore need desperate measures. Even the ECB is considering lowering rates in the same fashion as both the FED and the BOE € each in an attempt to revive the gloomy economic conditions. With unemployment reaching new highs and manufacturing sectors extremely negative, Trichet sounded more determined than ever to do everything in his power to boost the economy and if that means lower than 1% rates, so be it!

Let€™s not forget that tomorrow we have the final big event of the week, the non-farm payrolls, so traders may not want to commit either way for now as they are getting ready to position themselves ahead of the number. The forecasts so far have been very negative, and if we go by the latest jobless claims and ADP report, the number may potentially reach more than -680.000 jobs, which will make more than 2 million jobs lost over the last four months!

The euro and the pound are still negatively trading after the London closing, and at the moment we can see a brief re-tracement above 1.25 and 1.41 respectively. Traders are taking their day's profits and getting ready to trade Friday€™s events. From now until tomorrow€™s NFP, the pairs may consolidate between 1.25-1.26 and 1.4050-1.4150€¦