Overall, currency markets traded mixed during the Asian session. The European based pairs, the euro, swissy and the pound barely moved, while the yen and the aussie had strong momentum and were able to make new highs. However, both the aussie and the yen retraced almost completely the higher moves made. For now, the market heads towards the last European and U.S. sessions of the week, with the infamous NFP scheduled later in the day.
The Euro (Eur/Usd) appeared very reluctant to move during the early part of the overnight session, but as the market headed towards the interest rate decision, the euro gained momentum. Eventually, the euro finished the day very strongly, as the ECB reduced the interest rate by less than expected. In the Asian session, the euro declined 20 pips, on very light volume.
The Pound (Gbp/Usd) saw strong momentum on Thursday, gaining almost 300 pips. Additionally, the daily candle produced no wick, denoting the pair’s strength. In the Asian session, the pound started the night near the 1.4700 resistance area, where the pair topped a few weeks back.
The Aussie (Aud/Usd) gained almost 200 pips on Thursday, having one of the strongest days from the pair’s recent past. The pair continued to strengthen during the overnight session, but ran out of steam during the late U.S. session. In the Asian session, the aussie rose a strong 70 pips, but completely retraced the move as the session progressed.
The Australian AIG services sector activity declined again during the month, although the rate of decline has eased slightly. The index rose by 3.4 points to a 35.6. This is the twelfth consecutive reading below the crucial 50 level which denotes contraction for the country
The Cad (Usd/Cad) after forming two daily bars which almost had no real body, the cad fell on Thursday more than 200 pips and run out of pivot points. The cad’s decline was fueled by gains in equity markets as traders’ were willing to take on more risk and by gains seen in the crude oil market.
The Swissy (Usd/Chf) bounced again off the area formed by the 20 and the 50-day simple moving averages, and fell 110 pips. During the U.S. session, the swissy re-tested the 1.1300 swing area, which now acts as a temporary support line. The pair traded in a tight 20-pip range during the Asian session.
The Yen (Usd/Yen) managed to break above the 200-day simple moving average on Thursday, reaching the highest value since November 2008. During the Asian session, the yen continued to advance and gained as much as 50 pips, but some parts of the move were retraced.