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Overall, the currency market managed to advance in the previous day of trading, on Tuesday, even though the S&P futures moved very little, and closed the trading session shortly under the break-even line. This is a major step forward for the currency market, showing that investors are looking to shed the dollar from their balance sheets. Ahead, there are a number of top-tier releases during both the European and the U.S. sessions, which will provide plenty of market momentum.
The Euro (Eur/Usd) gained 70 pips on Tuesday, reaching again the 1.3670 resistance area. For a second consecutive day, the euro traded on weaker momentum compared to how the other majors moved, suggesting that investors might be switching their sentiment on the single-currency. In the Asian session, the euro had no clear direction.
The Pound (Gbp/Usd) is trading very close to the 200-day moving average, after it advanced very strongly in the last two months of trading. Yesterday, on Tuesday, the pound experienced a very strong European session, but it spent the entire U.S. session trying unsuccessfully to break above TheLFB R2 (1.5500) area.
The Aussie (Aud/Usd) reached the highest value since early October on Tuesday, as the pair had a very strong overnight session. During the U.S. trading hours, the pair lost some of its momentum, trading most of the time side-ways and retracing some of the ground gained earlier. In tonight’s Asian session, the aussie slipped 30 pips down to the neutral pivot point (0.7715).
The Cad (Usd/Cad) fell down to TheLFB S1 (1.1555) even from the early part of the overnight session on Tuesday. However, the pair was unable to break anywhere lower from there, as it tried a number of times. During tonight’s Asian session, the cad remained trading in the same area, trying to find a direction.
The Swissy (Usd/Chf) declined 50 pips during the Tuesday trading session, moving inline with the overall market direction. In the second part of the day, the swissy tested the 1.1000 support area where it was rejected during Tuesday’s evening session. A further break lower for the swissy will depend on momentum during the next overnight session.
The Yen (Usd/Yen) struggled most of the time on Tuesday to break above the resistance trend-line that connects the 03.19 and the 04.28 lows. However, the move never came since the S&P futures traded only side-ways, being unable to provide strong support for the pair. Tonight, the yen lost 20 pips during the Asian session, breaking under the Tuesday’s low.
The Japanese economy contracted by a record last quarter as exports continued to shrink. Gross Domestic Product (GDP) contracted at an annual 15.2% in the three months ended March 31. Despite the poor -4.0% quarterly read, economists had actually predicted a worse 4.2% contraction for the quarter. Meanwhile, the fourth quarter was revised to -3.8% from -3.3%.
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