Overall, the market moved strongly during the Asian session as traders prepare for two interest rate decisions. The RBA is scheduled at 00:30am EST tonight, while the BoJ is expected somewhere around the same hour. At this point, it is still uncertain if the two releases will have any influence on the currency market. It seems that the currency market appears to be driven again by risk-aversion during the Asian session. Except for the RBA and BoJ decisions, the calendar ahead appears light
The Euro (Eur/Usd) formed a bearish engulfing pattern on the daily chart, suggesting that the upside trend might be approaching its final days. Having the market in a risk-aversion mode, the euro declined on Monday by130 pips, while it fell another 50 pips during the Asian session. Additionally, the pair managed to break under the low of the last two trading days during the Asian session.
The Pound (Gbp/Usd) bounced off the 1.4950 resistance area as the market begins to question the U.K.’s ability to access the public finance market in order to find buyers for its bonds. During the Asian session, the pound fell 60 pips as the dollar strengthened across the board.
The Aussie (Aud/Usd) formed two consecutive doji-stars on the daily chart on Friday and Monday. Usually, these patterns denote the markets’ indecision and this may also be the case here since the patterns were formed near an important swing point. On Monday’s Asian session, the aussie fell 60 pips ahead of the RBA interest rate decision.
The Cad (Usd/Cad) rose 100 pips in the first day of the week as the pair pulled higher from risk-aversion mode and by the declines seen in the commodity market. The cad closed just under the 100-day moving average, but broke above the resistance level during the Asian session.
The Swissy (Usd/Chf) bounced off the 200-day moving average on Monday, helping the pair finish the day 70 pips higher. During Monday’s Asian session, the swissy rose another 50 pips, forming a new high, but the move was easily rejected as it touched a 4h trend-line that has been hanging around since 03.30 09.
The Yen (Usd/Yen) is moving again on very strong momentum tonight. The yen fell as much as 80 pips during the Asian session under TheLFB S1 (100.35), paring the gains seen during the Monday trading session. In Tuesday’s early hours, the BoJ is expected to announce its new monetary stance.