Overall, the market extended the gains seen over the last day of trading, on Wednesday, during tonight’s Asian market. After two days in which the currency investors bought only dollars, the market had a sudden change of mind, as it seems that the pace of the credit crisis is slowing down. Ahead, the European and the U.S. calendars are packed with top-tier releases, something that may provide strong momentum in the market for the rest of the trading session.
The Euro (Eur/Usd) led the majors higher against the dollar on Wednesday. The euro headed higher, gaining 210 pips until the release of the FOMC report when it dropped 70 pips. Additionally, the pair broke during the last day of trading above the resistance trend-line that connects the 03.23.09 and the 04.24.09 highs.
The Pound (Gbp/Usd) broke above the 100-day moving average on Wednesday helped by the overall dollar weakness. During tonight’s Asian session, the pound continued to advance, gaining 40 pips. Lately, the pound has been trading in a channel, but now has a clear path to pick up further gains.
The Aussie (Aud/Usd) is approaching the 0.7300 area, which acted as a resistance point over the last half of year. The aussie was pushed forward by overall dollar weakness, which helped the pair gain 180 pips on Wednesday. Moreover, during the Asian session, the aussie managed to break above the 200-day moving average for the first time since August 2008.
The Cad (Usd/Cad) fell as much as 200 pips in the last day of trading, helped by the gains experienced in the crude oil market. During the Asian session, the cad fell another 50 pips, re-testing the 1.1980 support area. If the cad breaks anywhere lower, it will reach the lowest level since early January.
The Swissy (Usd/Chf) is currently trying to break below the 200-day simple moving average. This area has acted as an imported swing point over the past few weeks, preventing the pair from going anywhere lower. Yesterday, during the Wednesday trading session, the swissy declined 70 pips.
The Yen (Usd/Yen) gained 120 pips in the last day of trading, as the market rally compared with the dollar on positive news releases. Half of the gains came in the late U.S. session, during the FOMC statement. The yen opened the Asian session under the 50-day moving average, and gained 30 pips. During the late Asian session, the BoJ is expected to present their new monetary stance.