Overall, the greenback continued to strengthen during the European session. However, the euro and the swissy managed to endure the dollar’s strength during the Asian session, even though the other major pairs were sold strongly. Ahead, the U.S. calendar is light, which will allow the dollar index to continue tracking the U.S. futures and the equity markets.
The Euro (Eur/Usd) fell 80 pips during the Asian trading hours, down to TheLFB S1 (1.2975), but could not move any lower from there and moved higher. However, the pair resumed its downward trend at the London open. Over the last few days of trading, the euro has lost almost 400 pips and broke below the 1.3100 swing level.
The Pound (Gbp/Usd) was sold very strongly during the overnight sessions, breaking below two important support areas. The first to fall was a 4-hour support line, which has held since early March, and soon after the pair broke below the 20-day simple moving average. Currently, the pound is testing the 1.4580 support level.
The Aussie (Aud/Usd) was sold sharply during the overnight session, breaking below a trend-line that held the pair over the last month of trading. In addition, the pair is currently testing the 20-day simple moving average as support and ran out of support pivot points during the European trading session.
Producer prices in Australia decreased by 0.4% percent in the first quarter of 2009. This was mainly due to price decreases in the building construction (-1.6%), petroleum refining (-8.9%) and dairy product manufacturing (-4.9%). This was partially offset by price increase seen in industrial machinery and equipment manufacturing (+5.4%) and tobacco product manufacturing (+12.8%).
The Cad (Usd/Cad) gained 80 pips during the overnight session, breaking above the resistance line of the last few days of trading. Moreover, the cad managed to move decisively during the overnight trading hours, something that did not happen over the last period.
The Swissy (Usd/Chf) managed to break above the Friday’s high during the early part of the Asian session, but since then the pair moved mostly side-ways. For now, the swissy is trading near a one-month high, propelled by the gains seen over the last few days of trading.
The Yen (Usd/Yen) fell to TheLFB S1 (98.65) during the Asian session, but the pair managed to recover half of the decline after the London open. Over the last few days, the yen has traded in a 100-pip range unable to develop a decent trend.