Overall, the currency market lost some momentum as it was heading towards the European session, as was forecast by TheLFB.com Trade Team in the Asian market overview. The European session is likely to continue on modest momentum, since the release calendar is devoid of red flag releases and the majors are at important swing points.
The Euro (Eur/Usd) managed to break free from the 1.3500 resistance area, where the pair topped on Thursday and Friday. However, the pair hit resistance near TheLFB R2 (1.3575) despite repeated attempts to break higher. The euro’s outlook remains to the upside, as long as global equity markets extend the rally started in March.
The Euro-area PPI shows that the pace of inflation is dropping at a sustained pace. Producer prices fell 0.5% in February, following a 1.1% (revised) drop just one month prior. Retail sales in the Euro-area declined in February, following a 0.1% increase in the previous month. From one year ago, retail sales fell 4.0% in February, being the largest drop since records first started. The Sentix improved notably in April, after hitting a new all-time low last month. The index rose 7.4 points from March, to -35.3
The Pound (Gbp/Usd) rose almost 100 pips immediately after the Sunday open, but from there moved side-ways in a tight range. For now, the pound is trading near the 1.4900-1.4950 area, where the pair topped twice in January and February. The market expects that the BoE to vote to hold interest rates steady on Thursday.
The Aussie (Aud/Usd) advanced to the 0.7200 area during the early overnight session, but saw most of those gains erased as the market approached the London open. Additionally, investors are cautious ahead of tomorrow morning’s interest rate decision in which the RBA is expected to maintain the policy rate at 3.25% for a third consecutive month.
The Cad (Usd/Cad) moved lower to the TheLFB S1 (1.2240) during the Asian session, but the pair lacked the momentum needed to break lower. Eventually, the pair retraced the ground lost earlier, and is now trading, once again, near the Sunday opening price. The cad’s weekly economic calendar starts with two top-tier releases this morning, building permits and Ivey PMI.
The Swissy (Usd/Chf) tested the 200-day simple moving average during the Asian session, but again failed to break below. During the late Asian session, the swissy slowly started to back away from the support level, and re-tested the 1.3000 resistance level.
The Yen (Usd/Yen) advanced very strongly during the overnight trading session, extending the gains seen in the last few days of trading. The pair gained 70 pips, as the Japanese currency weakens ahead of tonight’s interest rate decision and monetary policy statement.