Asian Session Market Review – The Euro continues recovery with Trichet’s speech today likely to be the turning point

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The single currency has once again continued to extend gains over the US Dollar. The speculations from yesterday that the Euro could reach 1.43 had proven to be correct as the EURUSD pair was able to record a session high of 1.4306 and as it currently traded at 1.4287, which is close to the session high, it is highly likely that it will continue to rise. The markets are currently appearing to be risk positive. A speech is scheduled later in the day by the European Central Bank president Jean-Claude Trichet which could be just what the Euro needs to recover if hawkish comments are expressed. On a previous speech the president gave following the interest rate decision where he stated no hike is to be expected before July cause the Euro to lose 300 pips within minimal time and therefore anything stated which is misinterpreted could really sink the Euro.

The US Dollar was able to record gains against the Japanese of over 65pips during the US Session. During the Asian Session however the gains stopped as the USDJPY found a strong resistance near 81.80 that was tested several times prior to the pair value dropping. The session high was a 3 week high very close to the 81.77 of two days ago indicating that this level is of great importance . The decline in value is possibly by profit sell-off and therefore the pair is correcting prior to rising again. During the day bearish Growth Domestic Product data were announced in Japan indicating a decline in the Japanese labor market. Despite some temporary volatility the news did not help the USDJPY pair reach session high.

The Sterling had suffered major losses yesterday during the EU session. A loss of over 180 pips against the US Dollar was a result of mixed UK employment data and a slightly bearish attitude shown by the minutes of the Bank of England interest policy meeting that gave an unclear picture as to where an interest rate hike is to be expected. Nevertheless it was able to make some gains during the Asian Session and continue recovering but at a slower pace compared to the US Session recovery. Vital Retail Sales figures that could show the inflationary rise in the UK and offset the damage that was caused by the BOE minutes release are to be announced later in the day.

The Aussie was able to continue making gains over the US Dollar. The Australian Dollar was mostly boosted from the price in commodities that are appearing to be bouncing back. The Aussie found a resistance level around 1.070 that prevented it from reaching higher. The 1.0680 session high was a three day high. The next significant level for the currency to reach that could extend AUD gains lays around 1.0714.

Gold was traded relatively flat at around USD1496 an ounce. Nevertheless during the last 3 days the precious metal was able to record gains at a steady rate following the rise in the prices of oil and concerns over the sovereign debt in the Eurozone. The session opened at USD1493.88 an ounce with the high being at USD1499.64.