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Currency Pair Overview:
U.S. Session Halts The Dollar’s Sell-Off
Overall, the Monday session started very well with the major pairs extending their daily trading ranges by the middle of the European session. However, since then, the forex market came to a complete standstill, with the major pairs barely moving. This happened, even if the equity and commodity markets retained a portion of the momentum seen earlier in the day. Following the gains seen during the first part of the day, most currencies are trading close to the high of the year against the dollar. In order to push any higher, the S&P futures have to stay in the green.
Prices on a dollar index have reversed over the past week around the black resistance line, influenced by a higher stock market. Currently the market is threatening the yearly lows, where a breakout will signal for an unfinished ending diagonal with a more complex structure than on the first place.
The euro (Eur/Usd 1.4985) surged 150 pips throughout the Asian and the European sessions, but it spent the U.S. hours trading in a 30-pip range. This comes as the pair opened the U.S. session just below TheLFB R3 (1.5005) an area that is very rarely touched, on a daily basis.
The pound (Gbp/Usd 1.6745) was the best performing pair in Monday trade, advancing more than 200 pips, even from the overnight session. However, the pound retraced half of those gains, down to the 1.6750 swing point area, throughout the second part of the European session and during the U.S. trading hours. Monday represented the sixth consecutive day in which the pound moved higher
The aussie (Aud/Usd 0.9295) has posted very strong gains since the beginning of the year, but in Monday trade, the aussie gained only 100 pips, far less than the other major pairs. It is interesting that this happened, even though the commodity market, which is the usual driver of the Australian dollar, broke above important price levels.
The cad (Usd/Cad 1.0560) started the day with weak momentum, but as the market headed towards the U.S. session, the cad started recovering. Right now, the cad is trading 150 pips below the opening price, together with the pound being Monday’s best gainers. On the daily chart, the cad is trading just above the 20-day moving average.
The swissy (Usd/Chf 1.0080) is getting very close to parity against the dollar, something that will mark an important moment in the swissy’s price action. However, in order for this to happen, investors must remain in a risk-tolerance phase.
The yen (Usd/Jpy 90.00) ignored everything that happened in the financial markets in Monday trade, and had a range of only 50-pips. This comes as the pair is trading in the 90.00 area, a very important price point. Most likely, the yen is currently going though a re-distribution phase.
Disclosure: No positions