Overall, the majors traded mixed during the Asian session, after a very strong last day of trading. Even though the positive equity markets had no affect during the Asian session, this might change in the European session, helping investors buy quality assets rather than risky ones.
The Euro (Eur/Usd) had a lot of momentum to share during the last day of trading. The euro rose more than 220 pips during the overnight session, but fell almost 200 pips during the U.S. session, despite the positive equity markets. At the end of the day, the euro advanced 120 pips, but still was not able to close above the 20-day moving average. In the Asian session, the pair traded mixed.
The Pound (Gbp/Usd) traded on a relatively weak volume in the last day, and formed a doji-star on the daily chart. This happens, as the pair trades near the lowest value touched in the last two decades, and its outlook lies on the downside. The pound is very easily influenced by any bad stories about the state of the U.K. financial system, and it will not be very hard to find one during these days.
The National Institute for Economic and Social Research (NIESR) has stated that the U.K. economy contracted 1.8 percent in the three months to February. This follows output falling by 1.7 percent in the three months to January. The NIESR concludes that additional bank credit may make it easier for companies and businesses to cycle through their stock which will slow the rate of contraction.
The Aussie (Aud/Usd) managed to close above the 20-day moving average for the first time in the last month. Additionally, the pair was the only one that did not retrace the early gains during the U.S. session, and closed almost near the high of the day. Today, the trick would be for the aussie to manage to stay above the support area too.
Home loans in Australia came in at 3.5 percent which is slightly lower than analysts forecasts of a 4.0 percent read. In seasonally adjusted terms, dwelling finance commitments increased 0.7 percent while owner occupied and investment housing grew at 2.3 percent and 3.8 percent respectively. The consumer sentiment indicator for Australia came in at -0.2 percent from last month’s -4.6 percent reading. The sentiment index came in at 85.6 points in March and this is the fourteenth month that the index has held below 100
The Cad (Usd/Cad) fell as much as 270 pips during the overnight session, but the U.S. trading hours reversed some of this decline. At the end of the last day of trading, the cad declined 180 pips. In the Asian session, the cad extended yesterday’s declines, and fell another25 pips.
The Swissy (Usd/Chf) formed a large doji-star for a second consecutive day. The swissy declined during the overnight session as much as 160 pips, but during the U.S. session, the pair retraced everything back. The daily chart shows the pair’s trading range was between the 20 and the 50-day moving average.
The Yen (Usd/Yen) fell during the intra-day session 110 pips, even though the equity markets rallied. Eventually, the yen recovered some of the declines during the late U.S. session, and closed the day only 30 pips lower. In the Asian session, the yen traded mixed.
Machinery orders for Japan fell by 3.2 percent in January which is much better than the 4.9 percent fall that analysts had been expecting. This is fourth continuous month in which machine orders fell. Domestic corporate goods prices came in lower than expected with a reading of -1.1 percent as wholesale prices fell at a faster pace during February as the global recession slashed the cost of energy and other commodities.