Overall, despite the report calendar being loaded with top-tier reports, the currency market has failed to move anywhere of importance in trade on Thursday. The pound was the only pair that had a daily range bigger than 100 pips, while the cad and the swissy were at the other end of rope, with a daily range of approximately 60 pips. The market’s inability to move is quite strange, since both the ECB and the BoE were scheduled today, and both offered plenty of opportunities for the market to rally. This is one of the first signs we have had that global growth may be starting to be gaining enough momentum, possibly, to be able to wean the dollar off the S&P drip-fee, and onto the interest-rate differential diet.
Prices on the dollar index daily chart are threatening the upper line of an ending diagonal, where a break-out will confirm that the bottom is in place. In this case a retracement into the red wave IV area will be expected, while the current lows around the 75.00 zone must hold.
The RSI indicator is showing a bullish divergence, which also indicates a change in trend direction.
The euro (Eur/Usd 1.4875) moved up and down around the 1.4860 area, where the 20-day moving average is located. Until now, the euro has failed to move anywhere decisively, even though the ECB Press Conference offered some very good opportunities for the market to rally. Historically, the ECB press conference is very volatile, but it had little effect on the market’s valuation.
The pound (Gbp/Usd 1.6580) moved approximately 170 pips during the day, but still it failed to break new ground. Moreover, other than the 130-pip surge seen during the BoE monetary policy decisions, the pound’s price action was actually thin. Right now, the pair is consolidating below the 1.6600 area, which has been the main swing point area over the last five months of trading.
The aussie (Aud/Usd 0.9100) had a range of only 80 pips on Thursday, as the pair failed to push above the 20-day moving average. However, the aussie found the strength required to break above the 0.9080 area, where a 2-week old trend-line was found. On the medium term, the aussie’s outlook remains to the upside.
The cad (Usd/Cad 1.0655) and the swissy were the slowest two moving pairs of the day. Since Thursday’s session opened, the cad moved only 65 pips, similar to how it performed during the prior day of trading. The cad is trading below the 50-day moving average, an important price point area.
The swissy (Usd/Chf 1.0160) moved only out of inertia, rather than momentum, in Thursday trade. The pair had a daily range of only 55-pips, which is exceptionally small even for a pair like the swissy. Ahead, the pair will have to pick up additional momentum in order to break near-term channels
The yen (Usd/Jpy 90.75) moved lower during the first part of the day, after the market rejected a test at the 91.00 area. To the downside, the yen fell to the 90.00 support area, which reconfirms this area’s importance. Right now, the yen is trading in the 90.75 area, where the 20 and the 50-day moving averages can be found.
