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Overall, the dollar index lost almost 0.60% on Tuesday, as most currencies headed higher against it. However, the gains would have been even bigger if the dollar had not retraced some of the intra-day declines during the U.S. trading hours, helping the S&P futures head lower. Ahead, the market is expected to retain strong trading momentum, as a number of important releases are scheduled over the next two days.  

The Euro (Eur/Usd) rose as much as 150 pips during the overnight session, but shed a considerable part of these gains throughout the U.S. trading hours, as the S&P futures headed lower. During the European session, a release showed that inflation fell to 0.0% in the Euro-area, while the German economic sentiment gauged by Zew release improved to 44.8 in May.

The Pound (Gbp/Usd) advanced the most among the major pairs, gaining almost 300 pips from Tuesday’s low to high. Most of the gains came during the European hours, after a release showed that inflation declined less than expected in the U.K. Many say that the BoE overestimated its CPI projections, since even now the inflation gauge is standing at relative high values. On the daily chart, the pound appears to be forming an engulfing pattern. 

The Aussie (Aud/Usd) was propelled higher during the Asian session after the RBA said there is no need for any further rate cuts. Since then, the aussie has formed an upside channel, which drove the pair 160 pips higher. After the U.S. open, the aussie retraced almost half of the gains posted earlier in the day. For now, the aussie appears to be forming a large doji-star on the daily chart. 
 
The Cad (Usd/Cad) formed a V-shape pattern on Tuesday, during the intra-day trading session. The pair lost approximately 100 pips during the first part of the day, while during the European session the cad traded in a 30-pip range. Shortly after the U.S. open, the cad surged again higher, to trade near Tuesday’s opening price. 

The Swissy (Usd/Chf) declined near TheLFB S1 (1.0820) during the Asian session, as investors entered risk-tolerance mode. The swissy wasted an important part of the European session struggling to break below the pivot point area and at the same time below the 20-day moving average, but then started again to head higher in the U.S. session. During the European session, a release showed that industrial production tumbled 13.1% in the previous quarter, much more than expected. 

The Yen (Usd/Yen) declined as much as 180 pips throughout the Asian trading hours, but then retraced almost half of the decline during the European session. The Japanese yen’s strength came back as the Bank of Japan said that the strong pace of contraction seen in the Japanese economy is easing. In the U.S. session, the pair resumed its downward path, falling again down to TheLFB S3 (96.40) 

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