After the plunge in markets yesterday amid rising woes over the debt crisis in Europe and Trichet's failure to calm markets after he said the ECB did not consider the option of buying government bonds. The fears extended further over the prospects for the European crisis to grow and threaten the recovery of the global economy.
Nonetheless, after the disaster that occurred last night and the reshaping of the market, US regulators plan to examine if there was fraud and manipulation in yesterday's plunge in an attempt by professionals to benefit from the turmoil illegally. The SEC and the CFTC said in a joint statement after closing that they will examine the unusual trading that contributed to the plunge.
In the Asian session the markets started to calm gradually to regain some of the acquired losses, as the dollar and the Japanese yen that surged on haven demand declined today as others such as other majors attempted to regain the losses. The dollar index traded in the Asian session between the low of 84.54 and the high of 84.90 and currently trades around 84.75. Still the labor market figures from the US and the nonfarm payrolls are to be released though the market remains irritated over the ongoing turmoil in the market. The probe into illegal turmoil in the market might ease the losses seen and support the nonfarm take effect if it was positive though unemployment is expected intact at 9.7%.
The euro in the Asian session traded among the highest of 1.2723 and the lowest of 1.2585 and currently around 1.2710. The fear is still lingering in Europe over the debt crisis and offset data from the continent that have been positive, we are expecting a decision from the most important Parliament in Europe, the Germany Parliament, on the bailout to Greece and hopes are for the market crash yesterday is sufficient to convince Germany not to play new games! Over hourly basis the pair lingers in overbought areas, while over four-hour basis show the rebound from oversold areas; nonetheless, over the bigger timescale over daily basis, there is a possibility in a negative crossover in oversold areas. If the pair manages to breach 1.2820 it might head towards 1.2870 while breaching 1.2615 will take the pair towards 1.2555.
Sterling is agitated by the announced results from the general elections that show the Conservatives with the biggest number of seats, though still short of majority confirming the first hung parliament since 1974 after nearly 500 election results. The pair traded between the highest of 1.4776 and lowest of 1.4935 where the pair is currently trading around 1.4867.
As for the dollar versus the yen, the pair is trading among the high of 92.77 and the low of 90.97 and at the time trading among 92.29 and 92.25. Momentum indicators over hourly basis are in overbought areas as over four-hour basis show the pair's rebound from oversold areas.