Majors Forex Pairs Stall Ahead Of ECB

NEW YORK (TheStreet) -- The dollar index traded flat ahead of the European Central bank press conference, but the foreign exchange market saw two important exceptions from two major pairs moving in opposite directions.

At a time when the euro and the pound had a 40-pip range overnight, the aussie advanced as much as 90 pips to reach the highest value in two months. The aussie's surge was triggered by better-than-expected labor market data released during the Asian session. The yen was the second exception, gaining 70 pips overnight.

Looking ahead, the market is likely to come to slow down again ahead of the ECB press conference scheduled for 8:30 a.m. EST. Usually the major pairs pick up plenty of volatility during ECB President Jean-Claude Trichet's press conference. The outlook for Eur/Usd. and the dollar index to a greater degree, is highly dependent on the outcome of the ECB press conference.

The euro (Eur/Usd 1.4520) attempted to move higher during the first part of the overnight session but stalled during the European open. Thursday's opening price is where the pair trades and is holding within the range of the last three days. The ECB press conference will have a strong influence on this pair.

The pound (Gbp/Usd 1.6290) is consolidating just below the 1.6300 area, near the highest value of the last month of trading. The 100-day moving average is at the 1.6300 area which will require additional momentum to push through.

The aussie (Aud/Usd 0.9295) gained 90 pips during the overnight sessions after a series of positive news reports from the Australian labor market. The pair rose as high as 0.9325, near a two-month old resistance trend line. A break above will test the 12-month high at 0.9400.