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Overall, the major currencies strengthened compared to the dollar and the yen during the overnight session, as the pair retraced some parts of the declines seen during the second part of Wednesday’s trading session. This upside move came from the futures market, when the S&P futures retraced most of the declines seen during the intra-day session. Ahead, the first part of the European session has a light calendar, but at 7am EDT, the BoE is scheduled to announce their new monetary policy. This may move the pound, and the market, during the European trading hours.
The Euro (Eur/Usd) bounced off the 50-day moving average around Thursday’s open, which has helped the pair advance 30 pips. On the upside, the next major resistance area that the pair has to break is the 20-day moving average, which has acted as an important price point lately.
The Pound (Gbp/Usd) declined at a strong pace during the mid-U.S. session on Wednesday, but at the end of the day, the pound retraced some of the declines. During tonight’s Asian session, the pound rose as much as 50 pips, continuing to retrace the ground loss one day ahead as investors prepare for the BoE interest rate decision. At this point, the market expects the bank to keep the interest rate at 0.50%, but increase the size of the asset buying program.
The Aussie (Aud/Usd) traded around the neutral pivot point (0.7810) during the first part of the overnight session, even though for a short period, the aussie fell a limited number of pips. On Wednesday, the pair traded side-ways most of the day, but then tumbled 150 pips during the U.S. trading hours.
The Cad (Usd/Cad) sold off 50 pips throughout the Asian trading hours, after it formed a doji-star pattern on Wednesday. Moreover, the cad appears to be slightly trading in an up-trending channel, which has held the pair for almost two weeks now.
The Swissy (Usd/Chf) continues to trade within the same 50-pip range it developed on Wednesday, even though the swissy approached the support area throughout the Asian session. On the daily chart, the swissy seems to be trapped between the 20 and the 50-day moving averages.
The Yen (Usd/Yen) advanced 100 pips throughout the Asian session, something that happens very rarely. Helped by these gains, the yen retraced a portion of the declines seen just earlier in the day on Wednesday. For the rest of the week, the yen has a relatively light economic calendar.
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