The Dollar Continues to Advance Against Major Currencies

Overall, the dollar has posted some huge gains in the overnight session, advancing against the other major currencies. The dollar index is moving higher, trading just above the 77 area. There are extremely important U.S. economic releases scheduled for today that could either stop the dollar in its tracks or see the currency extend gains.  

The Euro (EUR/USD) declined for the third consecutive day, losing over 80 pips during the overnight session. The pair broke below the low of the previous session as the market expects the Euro-area fundamentals to further deteriorate. In the early European session, a release showed that German confidence had hit the lowest level since 2003, while the German Final Q2 GDP read was in line with market expectations of -0.5%.

The Pound (GBP/USD) is trading just above TheLFB S1, after it fell more than 100 pips since the Asian session started. It seems the pound cannot find a bottom, as the U.K. economy continues to go through hard times. Furthermore, the pound is now testing the low of the previous session; breaking any lower could mean a wave of short orders will hit the market.

The Aussie (AUD/USD) moved lower during the overnight session, falling more than 100 pips. The pair is trading just above TheLFB S3, and if the selling pressure continues, the aussie will soon run out of pivot points.

The Cad (USD/CAD) moved with limited strength during the overnight session, bouncing between the resistance and support areas of a well-defined range. The lack of momentum in the pair has kept the cad from breaking higher and stopped the dollar from posting huge gains, as it has with the other major currencies. During the early trading hours, the Cad tested the 20 day simple moving average.

The Swissy (USD/CHF) looks as though it is preparing a test in the 1.1040 area, where resistance is located. During the overnight session, the swissy advanced 60 pips, reflecting the strength the dollar posted overnight.

The Yen (USD/YEN) gained 60 pips since the Asian session started after it bounced off the 20-day moving average. The daily chart shows the relative strength index is in the buy area, between the 50% neutral line and the 70% overbought line.