Overall, the currency market saw weekend gaps for a third consecutive week. The dollar strengthened during the weekend trading hours, but gave up some of its gains during the first part of the Asian session. Ahead, the European and the U.S. calendar is light today, something that might not help the overall market’s momentum.
The Euro (Eur/Usd) fell 60 pips during the weekend session. However, the pair recovered most of the lost ground and managed to close the gap during the first few minutes of trading of the Asian session. Later this week, the ECB isexpected to reduce the overnight rate by another 50 basis points.
The Pound (Gbp/Usd) once again had the biggest Sunday gap, losing around 75 pips. From the opening bell, the pound advanced 45 pips, but it hit the 1.4280 resistance area, where the pair bottomed on Friday. In the last few days, the pound declined as some say the U.K.’s public finance is deteriorating at an increasing speed.
The Aussie (Aud/Usd) was sold lower by 45 pips over the weekend session. Throughout the evening , the aussie struggled to close the weekend gap. In the lastest period of trade, the aussie traded on very light volume.
New home sales have increased by 3.9 percent in February. This is the second consecutive monthly increase according to the survey that is published by the Housing Industry Association in Australia. Meanwhile, pre-contract sales of apartments and homes fell for a fifth consecutive month as a result of leery investors who are concerned that the credit crunch may constrain activity
The Cad (Usd/Cad) was the only pair that did not see a gap at the Sunday open. The pair trades just above the 100-day moving average, which has been an important area of price action over the last few days.Monday brings a release that is expected to show the Canadian economy contracted 0.6% in January.
The Swissy (Usd/Chf) opened 45 pips higher and. from there, hurried to completely retrace the move and close the weekend gap. Currently, the swissy is trading near an important swing area after bouncing off the 200-day moving average on Friday.
The Yen (Usd/Yen) had somehow a smaller gap at the Sunday open, of only 15 pips. During the Asian session, the yen traded in a very small range, less than 20-pip, testing the resistance area where it topped during the European and the U.S. sessions, on Friday.
Industrial production for February has risen slightly from the lows achieved in the previous month. Economists had been expecting a -9.1 percent decline when in fact the report was released slightly worse off, at -9.4 percent for the month of February. The index is still off by 38.7 percent from one year ago. The industries which contributed to the decline were transport equipment, general machinery, and electrical machinery