Overall, the currency market saw some strong gaps at the Sunday open. This was a consequence of the G7 meeting, where it was said that the current downturn will persist, sending the dollar higher against the major currency pairs. Ahead, the calendar is extremely light both in the European and in the U.S. sessions, something that could influence the currency market.  

The Euro (Eur/Usd) fell 70 pips during the weekend trading, and opened the new week just above the 1.2750 support level. If it breaks anywhere lower, the euro will touch the lowest value in the last two and a half months. On Friday, the GDP report showed that the Euro economy contracted 1.5%, more than expected, while some economies within the Euro-area contracted at the fastest pace in Q4 in the last two decades.

The Pound (Gbp/Usd) saw a massive 140-pip gap at the Sunday open, which made the pair break under the 20-day moving average. On Friday, the pound formed a large bearish pin-bar, bouncing off the 50-day moving average. Since August 2008, the pair never broke and held more than one day above this moving average.

The Rightmove House Price Index for the month increased to 1.2 percent, month over month. The average price advertised by sellers in February has fallen by the most since 2002, with a decline of 9.1 percent. In London, the fall was 3.5 percent, while mortgage approvals were close to decade-long lows in December. However, asking prices have risen 1.2 percent month over month and in London, prices grew by 0.3 percent.

The Aussie (Aud/Usd) moved without any real momentum, or volume, in the last three days of trading. In addition, during this period, the pair formed three consecutive doji candles, which shows that the market has no bias, at least for now.

The Cad (Usd/Cad) tested TheLFB R1 (1.2450) in the Asian session, helped by a 55-pip gap from the weekend trading. This is the fourth consecutive day in which the pair opens around the same level, suggesting the market’s indecision. In the last three weeks, the cad struggled to break above the 1.25 resistance, but it never succeeded until now.

The Swissy (Usd/Chf) is trading just near the 1.1650 resistance level, after it gapped 25-pips. The swissy struggled to break free from a 100-pip range, but it did not succeed until now. Currently, the pair trades above all the important moving averages.

The Yen (Usd/Yen) saw a small 15-pip gap at the beginning of this new week of trading. Also, during the intra-day session the yen managed to break under a trend-line that held the pair for the last two days.

Japanese growth contracted by 3.3 percent during the fourth quarter, which was below market expectations for a 3.1 percent decrease. This is the third month that the GDP has contracted in the world’s second largest economy as it falls further into a recession. Meanwhile, the third quarter was revised to 0.6 percent from 0.5 percent.