Currency Pair Overview Markets Trade Mixed Overnight

Overall, the market was mostly calm in the overnight session. The euro and the swissy moved the most, while the rest of the majors had no clear direction. The majors traded on very low volume since the Asian session started, reflecting the light economic release calendar.

The Euro (EUR/USD) advanced during the European session, even though earlier, during the Asian session the pair moved around the neutral pivot point (1.3490). Today was the first time this week that the euro headed higher, after dropping a large number of pips on Monday and Tuesday.

The number of unemployed persons looking for a job in Germany for the month of December rose by 18K, stronger than what analysts had expected. The Euro-area PPI shows that the pace of inflation is starting to slow at a strong pace. Producer prices dropped a record 1.9% in November, more than analysts had predicted. The number released for the month of October was left unrevised.

The Pound (GBP/USD) moved in the overnight session around the Asian open price. The pair tried, in the European session, to break above the high of the previous day of trading, but the move was rejected. Tomorrow, the BoE is expected to cut interest rates 50 basis points, down to the lowest rate on record.

The Aussie (AUD/USD) has traded flat overnight, without any clear direction, on low volume. The pair is trading just under the 100-day moving average, unable to move any higher. Yesterday, the pair touched the highest point since October.

The retail sales trend in Australia has increased by 0.1 percent in November. This was in line with market expectations yet slightly lower than the previous reading. During November food retailing and other retailing increased while department stores, clothing and soft goods, household goods, and cafes and restaurants decreased. The trend estimate has increased by 1.9 percent for the Australian retail series in November of 2008 when compared to the previous year.

The Cad (USD/CAD) also moved in a tight channel overnight, unable to sustain any relevant moves. The pair traded below the neutral pivot point (1.1865), in a 40-pip range. Traders now look forward to the U.S. open, when the cad usually has large swings.

The Swissy (USD/CHF) traded in a tight range during the Asian session, but managed to break lower at the London open. However, the par found temporary support near TheLFB S1 (1.1065), stopping the swissy from any further downward action. In addition, 1.1050 proved to be a very strong swing point in the past.

The Yen (Usd/Yen) is trading around the Asian open price, even though earlier the pair tested the 94.00 area and the 50-day simple moving average. Currently, the yen is at the highest value reached since early December, as Japanese officials complain about the yen’s strength.