Overall, Thursday’s overnight session was another day of hesitation in Europe, with just a small number of pairs able to break free from the range of the prior day of trading. However, the market’s resilience to move can be explained, unlike in the past few days, since the market is preparing for the interest rate decision coming from the Bank of England and from the Bank of Canada, expected at 07:00 EDT and 09:00 EDT. On top of this, the U.S. Trade Balance and Unemployment claims are expected at 08:30 EDT, something that will assure that the U.S. session will be very volatile, and may set the direction of trade for the rest of the week.
The euro (Eur/Usd 1.4535) tested the 1.4580 area during the European session, the same area where the pair topped in the prior day. However, the euro was rejected from the resistance level, after S&P futures started reversing at a strong pace. Right now, the pair is trading slightly below the neutral pivot point (1.4540), and some 50 pips away the high reached earlier in the session.
The pound (Gbp/Usd 1.6520) looked very resilient to a move over the last two days of trading, even though it is trading in a volatile fashion. This might have happened as the market is preparing for the BoE meeting, where the voting committee will decide upon the interest rate, and upon the size of the asset-buying program. The outcome of this meeting will probably influence the pound over the next few weeks.
The aussie (Aud/Usd 0.8550) tumbled 70 pips since the Thursday session started, being the worst performer of the day. The pair’s decline came as it broke below the 0.8600 area, and at the same time below a support trend-line that held the pair since Sep 02.
The cad (Usd/Cad 1.0845) came to a virtual standstill during the Asian session, but started moving throughout the European trading hours. Since the London open, the cad gained almost 70 pips and is now testing the 1.0850 area, where it had topped out during the last three days of trading. At 09:00 EDT, the market is expecting the interest rate decision from the BoC
The swissy (Usd/Chf 1.0420) moved in a side-ways channel throughout the overnight session, limited by the neutral pivot point (1.0425) and by the 1.0380 area, where the pair bottomed during the prior U.S. session. The swissy followed a similar pattern on Wednesday, and only started trending during the U.S. hours.
The yen (Usd/Jpy 92.20) swung around the neutral pivot point (92.05) in a 30-pip range during the Asian session and throughout the first part of European trading hours. For now, the yen is struggling to break above this range, but even if it does, the 92.50 area lurks just above, which has been an important price point lately.
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