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Overall, the light European calendar has taken its toll over the major pairs. Except for the pound, which lost nearly 150 pips overnight, the rest of the major pairs just moved up and down during the first part of the day. This happened as the futures markets failed to move anywhere decisively throughout the European session, but this will change as the market heads towards the U.S. open. At 09:00 EDT the markets expects the interest rate decision from the BoC to remain on hold, while one hour later Mr. Bernanke will testify in front of the House Financial Services Committee. On top of this, the earnings schedule is loaded with major companies today, something that certainly will be reflected in the forex market.
The Euro (Eur/Usd) moved in a 20-pip range during the overnight session, limited by the neutral pivot point (1.4195) and by the 1.4215 area. During the middle of the European trading hours, the euro managed to move above the intra-day range, but still the pair lacked the momentum required to test of the high of the U.S. session, at the 1.4240 area. Unless the S&P futures move decisively higher, the euro will not be able to break any important price point alone, today.
The Pound (Gbp/Usd) was the weakest pair among the majors during the overnight session, moving most of the time lower. So far, the pound lost 150 pips during the Asian and the European trading hours, retracing an important part of the pips gained over the last few trading sessions.
The Aussie (Aud/Usd) fell 40 pips during the early part of the overnight session, down to the neutral pivot point (0.8115). During the European session, the pair moved a few pips higher, but the move was quickly retraced as the rest of the major pairs failed to follow. If the pair does manage to break above the high set during the prior U.S. session, it would have the road clear towards the 0.8250 area, where the high of the current year is located.
The Cad (Usd/Cad) had a 25-pip range during the overnight session, swinging around the neutral pivot point (1.1075). The cad’s hesitation to move comes as the market awaits the interest rate decision coming from the BoC, scheduled at 9am EDT. Most likely, the cad will lead the market’s direction right after the interest rate decision.
The Swissy (Usd/Chf) spent most of the overnight session struggling to break the side-ways channel that the pair developed during the last U.S. session. Until now, the swissy failed to move decisively, even though it had a number of attempts. Ahead, the swissy has a mixed outlook, since some investors are suggesting that the SNB might be tempted to intervene around these levels, and sell the Swiss Franc.
The Yen (Usd/Yen) fell down to the 93.75 area, 35 pips below the Asian’s open price, but the pair retraced the move during the European session. For now, the yen is once again trading close to the price it opened on Tuesday, looking for a direction. On Monday, the yen formed a doji-star pattern on the daily chart, a sign of imdecision.
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