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Overall, the dollar saw a second consecutive day of decline on Wednesday, as the S&P futures managed to post small gains. Unlike the last few days, when the second part of the day was mostly a waste of time, most of the gains came today during the U.S. session. Ahead, the market is expected to retain its strong momentum, as traders prepare for a busy overnight session.
The Euro (Eur/Usd) gained approximately 130 pips on Wednesday, breaking above the high set in the prior day of trading. Most of the gains came during the U.S. session, but the pair also advanced 90 pips throughout the Asian session, which were shed shortly after the London open.
The Pound (Gbp/Usd) traded very volatile on Wednesday. Throughout the overnight session, the pair plunged 250 pips down to TheLFB S1 (1.6230), but then surged higher once again recovering most of the ground lost earlier. During the European session, a report showed that the unemployment rate and the claimant account increased less than expected in the U.K.. At the same time, the BoE minutes showed that the central bank had not seen any radical improvements in the real economy.
The Aussie (Aud/Usd) was not able to break anywhere decisively on Wednesday, and moved most of the time in a wide-range. During the early U.S. session, the aussie tested briefly the 0.7850 area, which has held the pair for almost three weeks. On Tuesday, the aussie formed a doji-star, and now appears it is going to form a second one.
The Cad (Usd/Cad) managed to break above the 1.1370 resistance area during the U.S. open, as the dollar strengthened across the board. However, also during the U.S. session the pair reversed, shedding every pip gained earlier. For now, on the daily chart the cad appears to be forming a pin-bar formation.
The Swissy (Usd/Chf) lost a little more than 100 pips on Wednesday as the dollar sold off at a strong pace throughout the U.S. session. During the European trading hours, a release showed Swiss retail sales grew 1.2% in April from one year earlier. Moreover, on Thursday morning the market expects the SNB to maintain the targeted 3-months Libor rate at 0.25%.
The Yen (Usd/Yen) declined 90 pips on Wednesday, as the pair bounced off the area formed by the 20,100 and the 200-day moving averages. However, now the pair is trading near the 95.50 area, which has acted as a major swing area in the past.
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