Anotherday, another wave of selling in all dollar related pairs, with both EUR/USD andGBP/USD being trading high and latter touching Julys highs at 2.0655.

            Yesterday we didn??™t have any news inthe economic calendar, therefore the lack of data, in combination with returnof risky carry trades; saw big moves in all yen related pairs and sterling.

            With tomorrow being the mostimportant day of the week, it is natural that most traders are in a ???wait andsee mode??? as there are clear risks in positioning for, or against the dollar afew hours before the announcement.

            With many analysts predicting a ratecut of 25 points, and markets already pricing in this outcome, the only otherway that we will see a big move in all dollar related pairs will be a surprisemove by Bernanke and friends. The two other scenarios would be either to leaverates unchanged and therefore give dollar a temporary boost, or cut as much as50 points like the last time, and so dollar can and will print new lifetimelows.

            With oil nearing $100 per barrel,and EUR/USD almost at 1.45, Bernanke s job is made quite difficult, as whateverhis decision will be, the reaction in the global markets is expected to beaggressive either way. The bank certainly doesn??™t want to surprise the marketsand cause a massive reaction like the September cut, so even if we see a 25points cut, the rhetoric might be hawkish so the dollar doesn??™t get hammeredonce again. Whatever the outcome, once thing is for sure: dollar will looseground after the initial reaction as the sentiment hasn??™t changed and marketstarget still is at least 1.45.

            After the Wednesday??™s events, let??™s notforget that Friday is another risky day with non farm payrolls being the othermajor event for dollar direction.

             Today, at the time of witting,GBP/USD is printing new multi yearly highs at 2.0665 and it looks like there isroom for more gains in the pair, ahead of New York open. This pair is trading withheavy tone and one could argue that there are not a lot of fundamental or eventechnical signals to support the extreme of this move. House prices and loanapplications fell yesterday, with the risk of tomorrow??™s nationwide pricesbeing negative again. This, will for sure catch up with the pair and if tomorrow??™sdecision favors the dollar, pound might get sold aggressively off its highestlevels.

            Until tomorrow though, there isstill consumer confidence to look at later on, but we don??™t think that traderswill react much to that, as it is already being forecasted lower and it iswidely known that the sentiment is negative??¦