Overall, the dollar continued to reign in the last day of trading, but it looks like the majors posted some small gains during the Asian session. If the equity markets remain under the break-even line, as they did in the last sessions, the dollar might continue to strengthen for the rest of the day. Ahead, the European calendar is somewhat light, but later in the day the NFP report is scheduled.
The Euro (Eur/Usd) sold heavily in the last day of trading, as the market prepared for Mr. Trichet’s speech. The pair fell as much as 160 pips, but managed to recover some of ground lost during the U.S. session. By end of the day, the euro lost 100 pips. In the Asian session, the euro traded without a clear direction.
The Pound (Gbp/Usd) traded exactly within the same range as in the previous two days of trading. The pound continues to look mixed, even though the BoE reduced the overnight rate by 50 basis points and embarked into quantitative easing strategy. Tonight, the pound gained 30 pips in the Asian session.
The Aussie (Aud/Usd) fell under the 20-day moving average, once again. The pair plunged 100 pips during the intra-day session, even though at the opening bell it was trading just near the resistance area. During the last three weeks, the aussie moved only one day up the other down, in a 200-pip range.
The Australian construction sector contracted again in February to 29.5 from a 34.1 reading seen during January. The index fell at a fast pace as weak market demand and diminished confidence led to further cutbacks in new project work. The seasonally adjusted rate fell 4.6 points and remains below the crucial 50 level which denotes expansion from contraction. The worst conditions were faced in the apartment and commercial construction sectors
The Cad (Usd/Cad) rose 170 pips yesterday, returning to its uptrend path. The cad traded on a very light volume in the first part of the overnight session, but started to gain some strong momentum before the U.S. open. In the Asian session, the cad lost 25 pips.
The Swissy (Usd/Chf) formed a pin-bar formation in the last day of trading, bouncing off the 1.1800 resistance area. The swissy moved higher during the overnight session, gaining 120 pips, but started to give up its gains after the ADP report. At the close of the last day of trading, the swissy had only left 30 pips, which were shed in tonight’s Asian session.
The Yen (Usd/Yen) fell yesterday, following two days of gains. As the S&P plunged nearly 4%, the yen was turning into the red, reversing the gains posted previously. At the end of the day, the yen declined 110 pips, engulfing the previous candle on the daily chart.