Currency Pair Overview Majors Pause A Little In The Asian Session

Overall, the majors saw traders react nervously and quickly to risk-aversion. The declines seen in the equity markets, mainly in the U.S. indexes after the new financial rescue plan was revealed, drove the dollar higher and the majors lower. Most likely, this would have had continued in the Asian markets, but the largest Asian market – the Nikkei – is closed tonight. The calendar holds some top tier releases ahead, in the European and in the U.S. trading hours.

The Euro (EUR/USD) traded in some very large swings. The euro fell 200 pips in the Asian session, something that rarely happens, but then recovered every pip and even gained a few more until the U.S. open. After that, the euro resumed its descend, closing the day 100 pips lower. The euro was practically the only major that strengthened against the dollar yesterday, during the European session. In the Asian session, the euro fell 40 pips.

The Pound (GBP/USD) tumbled 350 pips, as the market was driven by risk aversion. The pair fell somewhere lower in the overnight session, but was sold heavily shortly after the U.S. open. The pound declined yesterday for the first time in the last six days of trading, and only for the second time in the last 12-days of trading. Now, the pair trades again under the trend-line that connects the peaks from late October, December and January.

The Aussie (AUD/USD) bounced off the 100-day moving average in the last day of trading, and plunged 230 pips. The pair was sold continuous yesterday, and managed to find a bottom only near the 0.6500 support area. In its down path, the aussie broke under the 20 and the 50-day moving averages without even blinking.

Home loans in Australia grew twice as much as analysts’ estimates of 3.6 percent, to an astounding 6.4 percent in December. In trend terms, the total value of dwelling finance commitments increased 0.8%. Owner occupied housing commitments increased 1.7%, while investment housing commitments decreased 1.3%. The consumer sentiment indicator for Australia fell to -4.6 percent from last month’s -2.2 percent reading. The sentiment index came in at 85.8 points in February and this is the twelfth month that the index has held below 100.

The Cad (USD/CAD) rose 250 pips, the biggest one day rally in the last month. Most of the gains came during the U.S. session, when crude oil plunged on declining stock markets and a strong dollar. Helped by this strong upside momentum, the cad managed to break above the 20 and the 50-day moving averages yesterday. So far, the cad was unmoved by the Asian session.

The Swissy (USD/CHF) followed the general market sentiment, and traded in some large swings. Initially, the swissy followed the euro and rose 140 pips in yesterday’s Asian session, than shed-off every gain made, and fell another 140 pips in the European session. During the U.S. open, the pair tested the low reached on Monday, and in the same time the support area formed by the 20 and the 100-day moving averages.

The Yen (Usd/Yen) closed the last day of trading 120 pips lower. The yen was driven lower by the huge declines in S&P futures, as the market had a negative reaction to the new bank rescue plan. Currently, the yen trades trapped between the 20 and the 50-day moving average. The pair traded in a 15-pip range in the Asian session.