Overall, the market continued to advance against the greenback during the European session, as investors speculate that the worst of the economic downturn is behind us. As such, the dollar was sold against every major currency, while the S&P futures advanced during Wednesday’s overnight session. Up to now, the calendar has been light during the European session, but the financial markets are preparing for the U.S. GDP and for the FOMC meeting later today.
The Euro (Eur/Usd) managed to advance for a second day on Wednesday, helped by trade desks, which appear eager to take and carry risk on their balance sheets. In the last few sessions, the euro managed to break above the 1.3115 resistance area, but now the pair runs into the swing point formed by the 20 and the 100-day simple moving average near the 1.3200 area.
Consumer confidence in the Euro-area improved to -31, beating analysts’ estimates and rising from the -34 read the previous month. The better than expected read indicates that consumers are becoming more optimistic that the economic contraction may be slowing or at least close to a bottom. The Euro zone M3 number hit the wires at 5.1%, much lower than what analysts had previously estimated. The number for the month of February was revised to 5.8%, slightly lower than the initial release.
The Pound (Gbp/Usd) The pound’s daily chart looks very undecided, however, the pair managed tonight to break above the 4 hour resistance trend-line that connects the 04/16/09 and 04/24/09 highs. The next major swing point for the pound is to take out the 100-day simple moving average, which has held the pair down for more than a week.
The Aussie (Aud/Usd) resumed its upward direction, as the global economy looks more positive. Lately, the aussie has been dragged higher by the commodity markets, as raw materials are Australian’s biggest exports. On Wednesday, the aussie gained 90 pips, and broke above the 20-day simple moving average.
The Cad (Usd/Cad) managed to break below the 1.2175 support area during the overnight session, after failing to do so Tuesday, despite numerous attempts. Moreover, the cad is now heading towards the 4 hour support line, that connects the 04/16/09 and the 04/27/09 lows. Lately, the Canadian Dollar strengthened helped by the crude oil market.
The Swissy (Usd/Chf) is retesting the support trend-line of the last few sessions of trading. The Swiss Franc advanced during the overnight session, as the dollar declined across the board. Additionally, the swissy has moved very strongly over the last few days of trading, something that may well continue today.
The Yen (Usd/Yen) bounced from the 95.65 support area yesterday, forming a bullish pin bar on the 4 hour and daily charts. Currently, the yen is heading towards the resistance trend-line that connects the 04/13/09 and the 04/23/09 highs. The yen outlook lies to the upside as long the as S&P futures stay in positive territory.