Overall, the overnight markets were very slow. Both the European and the Asian sessions lacked any momentum, even though the calendar held some top tier releases. Ahead, traders await the U.S. open, when usually the market sees an increase in volume.

The Euro (Eur/Usd) traded without a clear direction in the overnight market. The pair tested the 20-day simple moving average and the neutral pivot point (1.2805) in the Asian session, but moved higher during the European session. Yesterday, the euro rose more than 200 pips.

The German economy contracted in the fourth quarter by 2.1%, as expected. The released number represents the biggest quarterly drop since the German unification. Compared with Q4 2007 the German economy contracted by 1.7%.

The Pound (Gbp/Usd) rose 80 pips in the Asian and European trading hours. The pair continues to trade between the 20 and the 50-day simple moving averages, even though it is acting as though it wants to break to the upside. Tonight, the pound advanced for the fifth consecutive day.

In the fourth quarter, the U.K. economy contracted by 1.5%, unrevised from the preliminary release. In the third quarter, the U.K. economy posted a -0.7% read. The two consecutive quarters indicate the U.K. economy has officially entered into a recession, similar to the Euro-zone and U.S. economies. From the fourth quarter of 2007, the U.K. GDP contracted by 1.9% in Q4 2008.

The Aussie (Aud/Usd) managed to break above the 20-day simple moving average yesterday, but today the pair seems to be reluctant to move anywhere higher. The aussie traded in a relatively small range overnight, on weak momentum. Most likely, the aussie will retest the support area before moving higher.

The release of the Australian wage price index showed that it rose 1.2 percent this quarter. This is above analysts’ expectations for a 0.9 percent increase. The trend estimate for construction work completed rose 2.6 percent in December of 2008 while the seasonally adjusted estimate came in at 1.7 percent. This comes after a strong revision higher of the September quarter, from 4.4 percent to 5.5 percent.

The Cad (Usd/Cad) bounced off the 20-day simple moving average in the Asian session, rising 40 pips. For now, the cad trades near the neutral pivot point (1.2450), even though it broke above during the Asian trading hours. Today was the first time in the last six days the cad moved higher.

The Swissy (Usd/Chf) tried to move higher during the late Asian session, but reversed and broke lower shortly after the London open. Tonight, the swissy has traded between the 20 and the 100 day simple moving averages, which has acted as a swing point for the last few days.

The Yen (Usd/Yen) traded mixed in the overnight market, following the U.S. futures. This comes, after yesterday the yen rose the most in its recent history, reaching a three month high.

The trade balance in Japan has plummeted by 45.7 percent from one year earlier. This is after a 35 percent fall seen the previous month and is the sharpest decline seen since 1980. The gross domestic product in Japan has shrunk by an annual 12.7 percent pace in the last quarter.