Overall, the majors traded mixed in the last day of trading, but seems to have found a common direction during the Asian session, to sell the dollar. Also yesterday, the market experienced some huge volatility after the Treasury Secretary responded to the critics made by Chinese officials about the dollar’s status as a currency reserve. The majors moved a huge number of pips during the remarks, but retraced everything back in the minutes before.
The Euro (Eur/Usd) finished the day gaining 90 pips, after three consecutive days in which the pair was sold. The euro traded side-ways in the early part of the overnight session, but started to advance shortly after the London open. In the Asian session, the euro advanced 30 pips, testing the high of the last day of trading.
The Pound (Gbp/Usd) fell 180 pips yesterday, paring the gains seen on Tuesday. Additionally, the pair also closed under the 100-day moving average, as the British pound was sold against every other major currency. In the Asian session, the pair re-tested the moving average, after it gained 70 pips.
The Aussie (Aud/Usd) except for a few breakout attempts, the pair traded mostly side-ways just under the opening price. At the end of the day, the aussie formed a doji-star pattern, which usually denotes the market’s indecision. During the Asian session, the aussie advanced 30 pips.
The leading index for Australia has decreased 0.6 percent for the month, falling to a reading of 111.2. This is the fifth consecutive decrease for the index. Contributing to the declines seen were building approvals, share prices, and the yield spreads. Retail sales have continued to make a large positive contribution for the index.
The Cad (Usd/Cad) also formed a doji-star pattern yesterday, but for a second consecutive day. On the downside, the pair bounced off the 1.22 area, which holds the pair for the last five days, while on the upside, the cad hit the 100-day moving average. The pair barely moved during the Asian trading hours.
The Swissy (Usd/Chf) managed to open under the 200-day moving average tonight, after it fell 90 pips in the last day. However, most of the time the swissy traded in a tight range, except for a very short period in which it fell more than 100 pips.
The Yen (Usd/Yen) declined 65 pips yesterday for the first time in the last four days, and closed under the 20-day moving average. During the intra-day session, the pair found a strong resistance area near the neutral pivot point (97.85), one that the pair never broke. During the Asian session, the yen rose 40 pips and re-tested the same area.
The corporate services price index fell to -2.6 percent for the month as commodity prices tumbled and a deepening recession caused companies to slow spending. Advertising agencies have been especially hard hit as demand wanes. This is the fifth month that the corporate services price index has fallen. Cheaper oil prices have reduced transportation costs which have caused Japan Airlines, and All Nippon Airways, which are two of Japans largest airlines, have plans to lower the cost of the fuel surcharge they charge.