Overall, the dollar strengthened again on Thursday, as the market returned to risk-aversion. The move came mainly from the S&P futures and from the crude oil market, which declined substantially in the last day of trading. During the Asian ession, the major pairs traded mixed. Ahead, the release calendar is light until the early U.S. session. There is some chance that the European session might experience smaller volumes than in an average day of trading.
The Euro (Eur/Usd) approached the 1.3730 resistance area on Wednesday, but due to dollar strength during the overnight session, the euro bounced. At the end of the day, the euro lost 60 pips. During the Asian session, the euro broke below the support area of the last three days of trading, falling under the 1.3560 area.
The Pound (Gbp/Usd) was trading flat during the overnight session, but the pair plunged lower after the BoE Inflation Report. The pound lost as much as 250 pips after the news release, falling from the high of the day. During the Asian session, the pound re-tested the low reached on Wednesday.
The Aussie (Aud/Usd) tested the 0.7700 resistance area during the early part of the overnight session, but started to move lower with the other major pairs, during the European session. At the end of the day, the aussie lost 120 pips, reflecting the declines from the commodity market.
The Cad (Usd/Cad) traded side-ways during the European session, being the only pair that withstood dollar strength at that time. However, the U.S. open saw the Canadian dollar plunge 200 pips, in-line with the moves seen in the crude’s market. The cad traded side-ways during the Asian session.
The Swissy (Usd/Chf) failed for a third consecutive day to break above the 1.1000 level on Wednesday, even though the dollar strengthened against all of the major currencies. Despite this, the dollar gained only 15 pips against the Swiss franc, leaving this currency to decline the least on Thursday. In the Asian session, the swissy re-tested the 1.1000 resistance level.
The Yen (Usd/Yen) lost another 100 pips on Wednesday, taking the total amount of pips lost over the last four days of trading to a little more than 400. Moreover, the pair managed to break on Wednesday under the 95.75 support level, which held the pair for one month. During the Asian session, the yen gained 30 pips after it bounced off of the 100-day moving average.