Overall, the Asian session kicked off very strong, most of the pairs enjoying the market’s momentum. For a period, the dollar strengthened as the Tankan release showed things are getting rather worse, but some parts of the move have already been retraced. Ahead, the calendar is loaded with top-tier releases both in the European and in the U.S. sessions.
The Euro (Eur/Usd) is looking undecided on the daily chart. In the last two days of trading, the euro was unable to break anywhere decisively, and every gain it made during the overnight session retraced in the U.S. session. Despite this, the euro had a strong momentum during the Asian session, moving almost 100 pips.
The Pound (Gbp/Usd) gained only 60-pip in the last day of trading, even though it advanced more on an intra-day basis. The pound traded in a 70-pip upward channel, looking vague and resilient to break any important swing areas. During the Asian session, the pound fell 50 pips and broke under the channel support line.
The Aussie (Aud/Usd) gained as much as 170 pips yesterday, but the pair started to retrace some of the recent gains during the late U.S. session. The downward move was extended during tonight’s Asian session as the pair fell more than 90 pips from the high set during the last day of trading.
Retail sales in Australia have decreased by 2.0 percent in February which is higher than analysts’ forecasts of a -0.5 percent decrease. This is the largest decline seen in the retail sales report in the past 12 months. Over half of the Australian economy is related to consumer spending. The building approvals from Australia rose a seasonally adjusted 7.8 percent, month over month, in February. This is the first increase seen in the index since June 2008
The Cad (Usd/Cad) gained 40 pips as it opened the Asian session above the 20-day moving average. During the last U.S. session, the same 20-day moving average acted as an important swing point. For the rest of the week, the cad has a clear calendar.
The Swissy (Usd/Chf) bounced off the area formed by the 20 and the 100-day moving averages in the last day of trading. From there the swissy fell 100 pips, but during the Asian session it retraced half of those declines.
The Yen (Usd/Yen) was volatile in the Asian session. The pair had a 100-pip range, influenced by the Tankan read, which fell to a 30-year low. Yesterday, the yen advanced 150 pips and tested the 200-day moving average for the first time since October 2008.
The Tankan business confidence survey, which includes some of the largest companies in Japan, has fallen to a new low of -58. This is a sign that the country may be in for an extended recession as companies cut jobs and limit spending. Japans exports plummeted in February by 49.4 percent as consumers worldwide curb spending.