Overall, the market traded side-ways during the European session, after a very strong Asian session. The currency market saw limited volumes and momentum, similar to what happened in the equity markets. The currency pairs may pick up momentum as important U.S. economic data starts to be released this morning. Today’s market hesitation comes as most pairs are trading near important swing-points, which may influence the market over the coming period.
The Euro (Eur/Usd) gained 80 pips during the early Asian session, but since then, the euro has struggled to move significantly. For now, the euro trades near a 7 week high, barely below the 1.3750 resistance. If the euro manages to break above the resistance area, it will touch the highest value since early January.
The Pound (Gbp/Usd) struggled to find a clear direction during Wednesday’s trading session, even though it moved close to 70 pips. Investors were cautious on the pound, as during the European session the BoE is expected to release the inflation report. Over the last period, the report had a very powerful influence over the pair’s behavior.
The Aussie (Aud/Usd) advanced to TheLFB R1 (0.7700) area during the overnight session, but was not able to break higher, despite numerous attempts. The aussie peaked at the same area on Friday. To some extent, the aussie traded similar to the swissy and the cad during the overnight session.
The Cad (Usd/Cad) declined 50 pips shortly after the close of the U.S. session. However, since then the pair traded in a 25-pip range. In the last six weeks of trading, the cad has declined sharply, helped by the gains observed in the commodity markets and by investors turning positive on the Canadian economy.
The Swissy (Usd/Chf) fell 80 pips in the first minutes of trading during the Wednesday session, something that rarely happens, but since then the pair moved side-ways. During the late Asian and the European sessions, the swissy moved in a 30-pip range, slightly above the 1.1005 level. For now, the swissy trades at the lowest level since January 2009.
The Yen (Usd/Yen) moved very strongly during the early Asian session, but soon the pair lost its momentum and traded side-ways. Right now, the yen is standing just above the 95.75 support area, which has held the pair since late March.