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The month of May has had few equity positive runs, and has remained range-bound for most of the time, with a bias towards short stock selling if anything. In that time we have run the gauntlet of each global region opening and trying to reverse the pattern that came before, but most running into a wall of indifference each day as the focus remains on earnings season coming to an end.
That changed on Monday, and equity markets broke hard for the first time since the first trading week of the month, and took the dollar on a trip lower to test support. The moves on Wall Street confirm the fact that the last bastion of Usd safety seems to lie in the inability of equity markets to break near-term S&P resistance, but if the moves made to get on the long side of stocks continues in Asian and European trade overnight we may see the strongest test of Usd support that has been forthcoming for quite a while.
We have noted all month that we just needed a long equity move to free the major pairs up, and we now have got it. Team LFB members said. The aussie, cable, and cad all moved hard against the dollar, whilst euro and swissy were content to bounce off support rather than break new upside ground. Another global session of positive stock trade will very likely drag those pairs into the fray.
The week gets busy from Monday night in regard to economic releases, and Australia gets things moving with the 21:30 EDT Monetary Policy Meeting Minutes. The fact that Aud/Usd is placed at near-term resistance really may allow for a big move, either way. The U.K. then starts its busiest economic week of the year with CPI reads at 04:30 EDT, and that then leads into the German ZEW economic sentiment surveys; three releases from three regions that historically move prices.
We will cover the moves with Trade Plan alerts as well as intra-day Signals as the sessions get underway. the Trade Team said. The Trade Plans and Signals closed 75% of the numbers in the green overnight, and made the most of the break that came. All that forex traders had asked for was an equity market that moved hard, rather than one that went sideways with a one-day up, one-day down pattern; and that is just what they got on Monday.
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