Currency Pair Overview Is this the quiet before the storm?

Overall, the currency market moved a very small number of pips lately. This general lack of momentum and direction was also seen in the Asian session, having most of the pairs come to a standstill. These could be either a return to normal, which was seen before the credit crunch begun and characterized by smaller trading ranges and low volatility, or is just another quiet sea before the storm. Chances are the market will continue the same way in the European session, where, except for a U.K. release, the calendar is empty.

The Euro (EUR/USD) moved along side the neutral pivot point (1.2630) in the last day of trading, having only some weak attempts to break higher or lower. In the Asian session, the pair continued the same side-ways move, in a 30 pips range.

The Pound (GBP/USD) spent much of the last day moving along the 1.50 area in a tight channel. The pound saw some shy attempts for a breakout, but as expected they were unsuccessful, until late in the U.S. session when the pair fell lower. The pound re-tested the low made yesterday in the Asian session, but failed to break lower. 

The Aussie (AUD/USD) traded between some well-defined swing points. In the early part of the day, it bounced off the 0.64 area. After that, the pair headed up and tested TheLFB R1 (0.6580), where the 20-day moving average is found. In the Asian session, the aussie fell 30 pips.

Headlining a light day in regard to economic releases, the Australian MI leading index came in at a -1.0 percent month over month. Westpac has said that the figure indicates that growth in Australia will likely slow and be “barely positive” or possibly negative into the first half of 2009. The coincident index came in flat when compared to the previous months 0.3 percent rise. The main source of the decline was seen in the fall of the unemployment rate index, as it decreased from 0.1 to -0.2 and the civilian employment index that was down to 0.4 from 0.5.

The Cad (USD/CAD) had a weak day yesterday, trading within the range of the last few days. The pair made a quick test at the 20-day moving average around the U.S. open and this was the only thing that happened yesterday. In the Asian session, the cad moved only 20-pips.

The Swissy (USD/CHF) finished the last day having a very small trading range, less than 80 pips. However, the pair was very volatile, bouncing endlessly around the important areas. Yesterday, the pair made a new high for the current year, but in the Asian session, the pair moved side-ways in a 15 pips range.

The Yen (Usd/Yen) traded within the same tight support and resistance areas for a third day in a row. The pair is not able to break under the 96.00 area, or above the 97.40, even though the S&P futures market moved a lot in this period. In the Asian session, the pair traded mixed.

The Japanese all industry activity index came in at negative 0.1 percent for the month of September when compared to the previous month. This is in line with what economists were forecasting and an increase from Augusts upwardly revised -1.7 percent. The most heavily weighted sub-component, the tertiary index, fell by 0.6 percent month over month for September while the manufacturing index increased by 1.3 percent following Augusts 4.1 percent decrease.