Currency Pair Overview The Dollar Strengthens In The Asian Session

Overall, the majors saw some small sell orders in the Asian session, as some traders marked their profits. This is a consequence of the strong gains seen during the European and the U.S. sessions, when the majors rallied against the dollar. It will be a crucial day for the main currency pairs today, as most are sitting near important support or resistance levels. The market is likely to share a strong momentum today, as both the European and the U.S. calendar hold important releases.

The Euro (EUR/USD) traded between the neutral pivot point and TheLFB R1 in yesterday’s overnight session. During the U.S. open, the pair was able to surge higher, and rally against the dollar for the time in the last few days. In the Asian session, the euro moved 50 pips lower, falling near the neutral pivot point (1.2960).

The Pound (GBP/USD) traded along the same lines as the euro. The pair wasted the overnight session trying to break above the neutral pivot point, and succeeded only during the U.S. open. The pound closed the day near the 20-day moving average, paring every pip lost one day ahead. In the Asian session, the pair fell 80 pips.

The consumer confidence for the U.K. fell in January to 40, despite analysts’ forecasts for a 45 reading. This is the lowest reading since the survey began in May of 2004. There are serious concerns over the economy after further reports of job losses, and this is clearly affecting the views that consumers have on the present and future economic situation.

The Aussie (AUD/USD) rallied nearly 200 pips in the last day of trading, after the Reserve bank of Australia reduced the overnight lending rate by 100 basis points. The pair strengthened for the first time in three days, bouncing off an important support area. In the Asian session, the aussie fell 50 pips, affected by three economic news releases.

The Australian AIG services sector activity declined for a tenth consecutive month in the services sector for January, stated the Australian Industries Group’s report. The index rose marginally, by 1.7 points to 40.0. The building approvals from Australia fell a seasonally adjusted 2.9 percent, month over month, in December. This was against expectations for an increase of 2.3 percent. The trend estimate for total dwellings approved fell 4.9 percent for the 13th consecutive month in December. Retail sales in Australia increased by 3.8 percent in December, which is sharply higher than analysts’ forecasts of a 0.3 percent increase and follows a 0.4 percent increase seen during November.

The Cad (USD/CAD) rose 30 pips in the Asian session, after it declined yesterday for the first time in the last 3 days. The pair fell 130 pips, almost paring the gains seen on Monday. The cad was able to bottom yesterday, near the 1.23 area, where the 20 and the 50-day moving averages meet.

The Swissy (USD/CHF) declined 180 pips yesterday, falling near the area where the 20, the 50 and the 100-day moving averages meet. Most of the downside move came during the European trading hours and the U.S. open, and was supported by the euro and the pound.

The Yen (Usd/Yen) broke under the 89.00 area for a second consecutive day, as the market remained driven by risk. The pair initially rose 50 pips during the Asian trading hours, but then fell under TheLFB S1 (88.75) and broke under the low reached on Monday. In tonight’s Asian session, the yen traded in a bounded range, above the neutral pivot point (89.30).