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Overall, the currency market followed the S&P futures very closely during the overnight session. The major pairs traded relatively flat in the first part of the overnight session, but surged higher against the dollar shortly after the London open. Ahead, there are a number of top and mid-tier releases during both the European and the U.S. sessions, which should generate plenty of momentum.
The Euro (Eur/Usd) fell 50 pips to the 1.3585 support area during the Asian session. However, these declines were easily reversed after the London open, as the pair moved higher, inline with the S&P futures market. The next major resistance for the euro is the 1.3650 area, where the pair has peaked over the last few days of trading.
In April, the German PPI was released at -1.4%, lower than market’s expectations. The year-over-year read dropped to the lowest level since 1987, from -0.5% in March to -2.7% in April.
The Pound (Gbp/Usd) had a 40-pip range during the Asian session, but managed to move somewhat higher after the London open, re-testing the high reached on Tuesday. For now, the pound is trading near the highest value in the last 6 months of trading, getting very close to the 200-day simple moving average.
The UK CBI report shows the manufacturing sector’s future expectations remain gloomy. The release number came in at -56, slightly better than the previous month. However, the report also notes that some manufacturing firms expect output to pick up in the coming period, an important improvement from the previous months.
The Aussie (Aud/Usd) retraced part of the gains seen on Tuesday during the Asian session, but managed to move higher as the S&P futures rose during the European session. For now, the aussie trades near the highest value seen since early November.
The Cad (Usd/Cad) extended the range seen in the last U.S. session during the overnight trading hours. The pair traded between Wednesday’s opening price and the neutral pivot point (1.1580), during the Asian and the early part of the European session, but managed to move somewhat lower as crude moved above the $60 benchmark level.
The Swissy (Usd/Chf) struggled to break below the 1.1000 support area during the last few sessions of trading, but so far has failed. However, the pair might break the support area if the market’s overall direction is to short the dollar, and the S&P futures post strong gains. The pair is currently trading virtually unchanged from its opening price.
The Yen (Usd/Yen) fell nearly 60 pips during the Asian session, but recovered most of the lost ground shortly after the London open. Additionally, during the Asian session, the pair fell to the 100-day simple moving average, which has held as support over the last few days of trading.
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