Overall, the Asian market started very strongly, being pulled higher by the positive equity markets. However, as the market headed towards the European open, the majors pared the gains posted earlier. Currently, the currency market looks to be driven by risk-aversion, once again. As in the last period, the currency market remains susceptible to any economic news coming from the U.S. 

The Euro (Eur/Usd) is currently testing the 100-day simple day moving average, which has been the support area for the last few days. If the support level breaks, the euro may move much lower. However, the pair might find strength from the ECB’s fundamentals, as it seems the central bank will not cut interest rates below 1%. 

Industrial production fell in February in the Euro-area by 2.3%, less than what the market had expected. Compared with one year ago, industrial production is down by 18.4%, the largest annual drop on record. Inflation fell in March to 0.6% from one-year earlier, in-line with the Flash CPI forecast. The strong declines in CPI sub-indexes dragged the inflation gauge under the 2% target much earlier than forecast. However, the core CPI was again higher than expected, 1.5% vs 1.4%. 

The Pound (Gbp/Usd) gained almost 90 pips during the early part of the Asian session, but the move was easily retraced. Additionally, during the London open the pair broke below the Asian open price. The U.K. economic calendar is empty for the remainder of the week.

The Aussie (Aud/Usd) dropped 70 pips during the overnight session, as the market entered into risk-aversion mode, once again. For now, the aussie is holding above the 0.7200 support level, but the outlook lies to the downside as long as the S&P futures trade in negative territory. 

The Cad (Usd/Cad) traded on weak momentum during the overnight session. The pair tried, during the Asian trading hours, to break below the low of the previous day’s trading, but the move was rejected. During the European session, the cad tested the neutral pivot point (1.2080).

The Swissy (Usd/Chf) is currently testing the 20-day simple moving average, after gaining 50 pips during the European session. During the previous day’s trading the swissy also peaked near the 20 day SMA. Over the last period, the pair traded in a relatively tight range, with the weekly range of about 250 pips.

The Producer Price Index in Switzerland decreased in March from one month earlier by a 0.5%, much more than expected. The Swiss PPI shows deflation, for the time being, after producer inflation reached a new record in previous quarters. March is the eight consecutive month in which the inflation rate has slowed being dragged lower by the huge declines in the energy market 

The Yen (Usd/Yen) fell sharply during the overnight session, inline with the S&P futures market. Currently, the yen is once again trading below the 200-day simple moving average, which has become an important swing point in the pair’s price action.