Overall, the major currencies traded mixed against the dollar overnight. The euro and the swissy strengthened in the European session, while the rest of the major currencies moved lower. During the Asian session, the market was very active, something that rarely happen. The currency market is expected to retain its strong momentum in the U.S. session, when some important measures are expected to be revealed for the future of the financial system and the overall economy.

The Euro (Eur/Usd) plunged nearly 190 pips in the Asian session, on rumors about the Russian debt. However, it then started to form a base and tested TheLFB S1 (1.2885) until it finally broke above, in the European session. Out of the majors, only the euro and the swissy strengthened in the European session.

The Pound (Gbp/Usd) fell 150 pips in the overnight session. Initially, the pair fell 130 pips in Asian trading, but retraced almost the entire move. In the European session, the pair moved lower again, falling another 130 pips. The European session was very volatile tonight for the U.K. pound

Retail sales in the United Kingdom rose 1.1 percent and 3.2 percent on a total basis, from January of 2008. This is the best performance of the index since May. Food sales had stronger growth while non-food sales remained down for the year. In the United Kingdom, house prices again took a fall according to the Royal Institute of Chartered Surveyors. The report has shown that 76.3 percent of surveyors reported a decline rather than a rise in house price in January. The U.K. deficit shrank in December to £7.4 billion, more than market expected. The previous number was also revised lower, from a deficit of £8.3 billion to £8.1 billion.

The Aussie (Aud/Usd) moved lower in the overnight session, after it failed a test at the 100-day simple moving average yesterday. The moving average has acted as a resistance level for more than 6 months, in which the pair never broke and held above.

The National Australia Bank released the business confidence report this evening. Business confidence in Australia has fallen to -32. This is a record low for the index that was started in 1989 as demands for exports decline. This also adds to the fact that the Australian economy is falling into its first recession in the past two decades

The Cad (Usd/Cad) is once again testing the 50-day simple moving average. In the last period, the pair appeared unable to break free from this area, formed by the 20 and the 50-day SMA’s. During the overnight session, the pair tried to break below the neutral pivot point (1.2200), but failed. In the European session, the cad rose 100 pips.

The Swissy (Usd/Chf) moved very strong in the Asian session, gaining more than 130 pips. The pair tested TheLFB S2 (1.1780), the highest value reached in the last two months, but shortly after the London open it moved lower, shedding every gain made earlier.

In January, the Swiss CPI read shows that the pace of inflation is slowing from the high reached in July of 3.1%. The released number of -0.8%, is higher than the forecasted rate of -0.5%, while the year-over-year read fell down to 0.1%

The Yen (Usd/Yen) only managed to trade around today’s opening price in the Asian and early European sessions, despite that the S&P futures moved lower overnight. However, from the middle of the European session, the yen started to move lower, testing the 91.00 support area once again.