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The call to watch for the major pairs to pull back ahead of the G20 meeting, from 4 hour overbought areas on the majors, followed through ahead of the Wall Street open, says TheLFB Trade Team.
With a light calendar it would not be a surprise to see things now make another push higher on the dollar, and then to meander sideways into the 11:30 EDT European close, unless of course equity markets come to life and move hard one way or the other, they said.
Oil and gold have done their part in pulling back, as have the European equity markets, and that has left the Usd holding good support on the dollar index just above 79.00.
We know that given mediocre equity trade, which is what we have had for a month now, that there is not enough momentum to get the dollar lower than 79.00, and going forward we will use that area again as a place to expect a bounce from.
The 4 hour charts were highlighted yesterday as being ready to have completed the last of their near-term major pair strength moves, and now it looks as though a new cycle will be able to start in trade on Monday.
Do not commit too much to the moves on Friday in regard to lot size; there will be a lot of book balancing going on ahead of a big economic weekend.