Overall, the dollar strengthened once more in the Asian session, advancing against most of the majors. The dollar's strength is a reaction to the negative equity markets, as trade desks are again heading towards the safety of treasuries. Today, the calendar holds some top tier releases, so it is very likely the market will have a strong momentum, both during and after the European session.
The Euro (Eur/Usd) rose yesterday, for the first time this week, and broke above the 100-day moving average. However, the euro started to move lower in the Asian session, shedding 70 pips. The daily chart shows that usually, around the 1.36 area, the euro tends to move in a range, with a big number of swings.
The Pound (Gbp/Usd) advanced in the last day of trading nearly 200 pips. The pair traded trapped between the 20-day moving average, which acted as a support level, and the 50-day moving average, which acted as a resistance line. The pound was not able to break decisively either of these two important swing points. In the Asian session, the pound fell 80 pips, bouncing off the 50-day moving average again. Today, the BoE is expected to cut 50 basis points.
The Aussie (Aud/Usd) bounced off the 100-day moving average for the second day in a row. Tonight, in the Asian session the aussie fell 60 pips, down to TheLFB S1 (0.7070), affected by negative reports coming from Australia.
The Australian construction sector decreased to 30.9 in December from a flat 32.0 reading the previous month. During the month, firms were severely affected by the financial and economic crisis, as well as by the deteriorating demand as new projects stalled. The building approvals from Australia fell a seasonally adjusted 12.8 percent, month over month, in November. This was against expectations for a relatively mild decline of 1.4 percent. Australia has posted a lower than expected trade balance for the month of November. In seasonally adjusted terms, the surplus was A$1.45 billion; this is a decrease from October's A$2.95 billion
The Cad (Usd/Cad) rose yesterday for the first time in the last four days. The cad gained 120 pips, from which most of the move came only in the U.S. session. In the last few days, the cad moved in opposite direction with the overall market, because of the strong oil link.
The Swissy (Usd/Chf) had the opportunity to retrace some of the recent gains, yesterday. The pair fell 150 pips, even though, at one time, the swissy tumbled as much as 300 pips, touching the 200-day moving average. In the Asian session, the swissy rose 50 pips and tested the 20-day moving average.
The Yen (Usd/Yen) fell 100 pips yesterday, after the pair bounced off the 100-day moving average. The yen was also affected by negative equity markets, after the ADP report. In the Asian session, the yen rose 20 pips, trading under the neutral pivot point (93.00).