Overall, the European based pairs moved very little in Wednesday trade, and for a few moments, the euro, pound and the swissy almost came to a standstill. The cad, the aussie had some additional momentum, but still very thin, while the yen managed to reach the lowest value since January 09. Following the pattern of trading seen during the last few weeks the currency market might gather additional momentum during the U.S. session, but the clear calendar raises some doubts about the possibilities.

Dollar Index Technical View: TheLFB Member Charts
4 Hour Chart: Long possibilities. Main price points: 75.83. Looking for: Wave II)

The index looks very weak at the moment after prices broke through the 76.50 wave a) support recently. Currently, prices area testing 76.4% Fibonacci support area, which may be the key for a bounce to the up-side over the coming sessions. In this case prices must not break through the 75.83 critical support area, other-wise an expanded flat in the wave II) correction will be invalidated. Traders should know that wave two must never retrace for more than 100% of the wave one distance.

If the 75.83 is taken out, then we will have to re-work the wave count, and will likely see a short continuation move.

The euro (Eur/Usd 1.4715) moved only 50 pips during the overnight session, up and down around Tuesday’s closing price. On the daily chart, the euro is trading above all of the important daily chart moving averages, and just 130 pips away from the high of the current year. During the European session, a report showed that the euro area GDP contracted more than expected, 0.2% vs. 0.1%, but still, this failed to move the market.

The pound (Gbp/Usd 1.5890) had a range of only 60 pips during the overnight session, even though the pound is known as a very volatile pair. Since the day started, the pair only swung around the 1.5900 area, a price point that acted a very important numberover the last three days of trading. On Thursday, the market expects the BoE to maintain the interest rate policy at 0.50%.

The aussie (Aud/Usd 0.8935) reached a new high for the current year in Wednesday trading. The aussie found the strength to advance at a time when almost the entire currency market was moving side-ways as gold and metals – one of Australia’s main exports – advanced at a very strong pace over the last few trading session. In the medium to long term, the aussie’s outlook clearly lies to the upside.

The cad (Usd/Cad 1.0550) bounced from the neutral pivot point (1.0615) during the early Asian session, and since then, the is moving almost exclusively lower. With these declines, the cad has moved lower for four consecutive days, a time in which the pair lost approximately 300 pips.

Trade Plan of the Day: TheLFB Trade Plan is Usd/Cad, one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, plus S&P futures, oil, gold, and the dollar index.

The swissy (Usd/Chf 1.0290) was by a large margin the slowest pair of the overnight session, moving less 45 pips. This comes as the entire market saw a very small trading range, something that might continue during the upcoming U.S. session.

The yen (Usd/Jpy 88.20) was the most active pair in Wednesday trading, even though the yen has the smallest average trading range among the major pairs. The yen headed most of the time lower, and right now is trading at the lowest value since January 22 09. To the downside, the next important support area is in the 87.60 price point, where the yen will meet a support trend-line that holds since May 09.