Overall, the market re-tested the Monday’s lows during the overnight session, but the moves were easily rejected. During the European session, the majors started to head higher, but the gains, thus far, have been small. Ahead, the Bank of Canada will release its interest rate decision.
The Euro (Eur/Usd) re-tested the 1.2900 support area during the early Asian session and during the London open, but the pair was unable to push lower. Instead, the euro managed to break above the resistance trend-line that drove the market lower on Monday, and retraced some of the declines experienced in the last day of trading.
The Zew Economic Sentiment indicator for Germany improved again in April, for the sixth consecutive month, reaching 13.8 points. The index gained 16.5 points in April, from one month earlier. The index recorded a positive value for the first time since July 2007. In March, the German PPI was released at -0.7%, lower than market’s expectations. The year-over-year read dropped to the lowest level since 2002, from +0.9% in February to -0.5% in March.
The Pound (Gbp/Usd) made a new low during the Asian session, but overall the pair moved side-ways. Ahead of the London open, the pound again saw strong selling orders, but the moves were soon retraced. For now, the pound trades slightly above the 100-day simple moving average.
The U.K. Consumer Price Index declined in March to 2.9%, from 3.2% one month earlier. However, the Core CPI, which excludes volatile items, rose for a fourth straight month to 1.7%, from 1.5% in February. “To some extent, the CPI number does not justify the BoE’s concern of undershooting the inflation target. The core CPI keeps rising at a sustainable pace, while the CPI number is much higher than in other major economies, such as the U.S, Europe and Switzerland” TheLFB-Forex.com Trade Team said.
The Aussie (Aud/Usd) moved slowly higher during the overnight session. The pair gained 30 pips since the Tuesday trading session started, erasing a very small part of the Monday’s declines. The Asian calendar had two important releases for the Australian dollar, but failed to spark strong reactions from the pair.
The Cad (Usd/Cad) spent most of the overnight session trying to break above the 100-day simple moving average and at the same time above the high reached on Monday. However, the pair moved on low momentum and volume ahead of the BoC interest rate decision.
The Swissy (Usd/Chf) traded exactly within the same tight range seen on Monday. During the Asian session, the swissy traded most of the time in a 20-pip range, above the 1.1670 support level. After the London open, the swissy surged 35 pips, but the move was retraced.
The Yen (Usd/Yen) traded between two fixed areas during the overnight session. The pair tried, on the downside, to break below Monday’s low, but never found the necessary momentum to do so, while on the upside the yen struggled to take out the neutral pivot point (98.35).