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Overall, the dollar continued to decline during the overnight session, as the S&P managed to break, and hold, above the 945.00 resistance area. This happened as investors are accepting more risk on their balance sheets and are dropping the safety of the U.S. dollar. The next target on the major currencies would be the highs set at the beginning of June, following the dollar’s outlook that lies on the downside.
The Euro (Eur/Usd) gained only 50-pips during the overnight session, most of which came during the European trading hours. The euro has broken above the 1.4100 resistance area, which was main support area for the euro in the last week of trading. During the European session a release showed that inflation in Germany fell to 0% from a year earlier, the lowest level over the last two decades.
The Pound (Gbp/Usd) almost came to a standstill during the Asian trading hours, but surged higher during the European trading session. The pound is trading near the 1.6430 area, which has acted as an important swing point in the past. During the European session a release showed that production output increased in the U.K. in April for the first time in 12 months.
The Aussie (Aud/Usd) extended the gains started in the previous session. The aussie moved higher, gaining 120 pips on Wednesday, and totals 250 pips added over the last few trading session. Yesterday, the aussie rose the most among the major pairs in percentage terms.
The Cad (Usd/Cad) spent most of the European session struggling to break under the low set in the previous day of trading. As the pair approached TheLFB S1 at 1.0945 it reversed gears again. In the last three days of trading the cad has declined 220 pips.
The Swissy (Usd/Chf) had a 20-pip range during the Asian session, but even so the pair tried a couple of times to break under the low set on Tuesday. However, the break-out came during the European session, as the pair built some additional momentum. Swissy also broke under the 1.0750 area during the European session, which hass acted as an important swing area in the past.
The Yen (Usd/Yen) rose 40 pips during the overnight session, making the Japanese yen the only pair that declined against the dollar on Wednesday. During the European session, the yen re-tested the 50-day moving average and the 97.50 resistance area, an area that the pair broke in the previous day of trading.
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