Overall, the currency market is preparing for the last day of trading of the week. The overnight session moved somewhat slowly, losing some of the strong momentum seen in the last few days of trading. However, things are expected to pick up again during the U.S. open, as the calendar holds some top tier economic releases.
The Euro (Eur/Usd) traded almost flat in the early part of the overnight session, but picked up momentum as the market headed towards the European session. However, the euro was still not able to break decisively, in either direction, during the European session, and still traded in large swings around the Asian open price.
Retail sales in the Euro-area rose slightly in January, following a 0.3% (revised) decline in the previous month. From one year ago, retail sales fell 2.2% in January, from 2.4% in December. The January release was pulled higher, on a monthly basis, by the non-food sector, which grew 0.4%, but the food, drinks and tobacco sub-index declined 0.3%. From one year ago, both the food and non-food sectors are down by 2.4% and by 2.2% respectively.
The Pound (Gbp/Usd) fell to the neutral pivot point during the Asian session, but surged higher shortly after the London open. The pair gained almost 200 pips, and even managed to break above the 1.4000 swing area. Tonight is the third consecutive day in which the pound has strengthened.
The Aussie (Aud/Usd) tried, but failed, to hold above the 0.6570 area in the overnight session. The pair’s resistance area is formed by the 50 and 100-day simple moving average, something that might create some headaches for the aussie in the following period.
The Cad (Usd/Cad) struggled in the Asian session to break below the 1.2770 area, the place where it also bottomed one day earlier. The pair managed to break lower during the London open, and has started to create a decent downtrend. Currently, the cad trades near the support area formed by the 20 day simple moving average.
The Swissy (Usd/Chf) traded virtually flat in the overnight session, as the rest of the market was selling the dollar. Traders are reluctant to send the swissy lower after yesterday the SNB announced it will start intervening in the currency.
The Producer Price Index in Switzerland decreased in February from one month earlier by a 0.6%, much more than expected. The Swiss PPI shows deflation, for the time being, after producer inflation reached a new record in previous months. February is the seventh consecutive month in which the inflation rate has slowed being dragged lower by the huge declines in the energy market
The Yen (Usd/Yen) tested the neutral pivot point (97.30) in the Asian session, but bounced higher. From then on, the pair advanced during both the Asian and European sessions. Additionally, the yen tested the high of the last day of trading during the European trading hours.