Overall, the market was in a risk-aversion mode again in the overnight session. The dollar strengthened at a vigorous pace against the European counterparts, which seems to have a stronger exposure to the Russian debt market. However, the yen, which is usually the first pair to react to any changes the market goes through, had only a limited decline against the dollar. S&P futures also moved lower tonight.
The Euro (Eur/Usd) plunged nearly 180 pips in the Asian session, probably the most seen in a while. The move came after a news report said Russia might reschedule its payments, something that could worsen the international situation. Technically speaking, the euro bounced off the 20-day moving average, and it now seems to be heading towards the 1.27 support area.
The Pound (Gbp/Usd) managed to break above a trend-line that held the pair lower for almost 3 months. If the pound will be able to hold this value, we might see some upside action on the pound in the following period. In the Asian session, the pair fell 120 pips lower, but then recovered most of its declines.
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 rise in house prices in January.
The Aussie (Aud/Usd) is trading trapped between the 50 and the 100-day moving averages. The pair struggled to break free from this area yesterday, but only managed to do so for a short while. In the Asian session, the aussie tried the same move again, but the 50-day moving average stopped the pair from going lower.
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 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) still looks unable to break free from the 1.22-1.24 area, where the 20 and the 50-day moving averages meet. The pair traded in a 140 pip range, without having anything notable during the intra-day session. In the Asian trading hours, the cad extended the range seen one day earlier and tested the 50-day moving average again.
The Swissy (Usd/Chf) traded correlated with the euro lately. The pair fell down to TheLFB S2 (1.1495) yesterday, during the U.S. open, where it also bottomed. Soon after, the swissy started to move higher, forming a bullish pin bar at the end of the trading day. In the Asian session, the swissy advanced almost 100 pips, breaking a few pips above the resistance area.
The Yen (Usd/Yen) moved lower in the Asian session, but mostly traded flat for the rest of the trading day. The pair fell down TheLFB R1 (91.00) yesterday, testing the support area of the last few days. Tonight, the yen tested the same support area again, but could not break any lower.