Currency Pair Overview Dollar Seen Lower In The Asian Session

Overall, the currency market traded with weak momentum in the last day. Out of the majors, three formed a doji-star pattern on the daily chart, denoting the market’s indecision. In addition, the pairs also moved very light compared with the last few days of trading, suggesting the market still needs some time to dissect the recent news releases. In the Asian session, the market sold the dollar lower, even though the S&P futures were trading slightly lower.

The Euro (EUR/USD) formed an indecision pattern known as a doji-star in the last day of trading. The euro is trading between two important swing areas, the 20-day moving average, and the 1.28 support level, something that might confuse the investors. The Asian session proved to be good for the euro, since it already rose 70 pips. 

The Pound (GBP/USD) continued to decline yesterday, but for the moment, it looks like it found a bottom in the Asian session. In the last two days of trading, the pound declined 500 pips, from which 160 pips came yesterday. Currently, the pound is trading above the 20-day moving average, which appears to be a strong intra-day support area.

The Aussie (AUD/USD) formed a doji-star pattern at the close of the last day of trading. The aussie traded caught between two important areas, the 20-day moving average, acting as a resistance, and the 0.6500 support area. In the Asian session, the aussie surged 60 pips after a report coming from the Australian labor market, and tested the high of the previous day of trading.

The National Australia Bank released the business confidence report this evening. Business confidence in Australia has plummeted to all time lows as companies continue to cut back spending as a result of the slowing global economy. The unemployment rate in Australia increased by 0.1 percent to 4.8 percent in January which is slightly higher than analysts’ forecasts of an increase to 4.7 percent.

The Cad (USD/CAD) moved very little in the last day of trading. The cad’s trading range for the entire day was only 130 pips, from which most came during the U.S. session. In the Asian session, the cad continued to lack any real volume, moving less than 30 pips. Employment in Australia increased by 1.2K for January which is above expectations of 19.1K decrease. Full time employment increased by 33.7K to 7,670K while part time employment decreased by 32.6K to 3,071K.

The Swissy (USD/CHF) rose 45 pips yesterday, but mostly the pair moved without a strong volume. In addition, the swissy failed for a third consecutive day to break under the 1.1500 level, and in the same time under the 20-day moving average. In the Asian session, the swissy fell 30 pips.

The Yen (Usd/Yen) formed a doji-star formation in the last day of trading, showing the market’s indecision. Yesterday, the yen fell somewhere lower in the overnight session, but recovered and posted some small gains during the U.S. session. In tonight’s Asian session, the yen traded flat, trapped between the 20 and the 50-day moving averages.  

Domestic corporate goods prices came in lower than expected for the first time in more than five years with a reading of -0.2 percent. This is the first decline seen since December of 2003. The chief cause of this was falling commodity prices coupled with the fact that economists are predicting the worst recession in almost 50 years which may bring back deflation which plagued the country for almost 10 years.