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Overall, the dollar continues to gain ground against the major currencies throughout the Asian session, as the market remains in risk-aversion mode. The current period of dollar strength comes after the greenback lost more than 10% since March, which represents a very strong decline. As long as the global equity markets continue to head lower, the dollar’s outlook lies to the upside.
The Euro (Eur/Usd) managed to break below the 1.3800 area during the Asian session, which represents the 38.2% retracement area from the uptrend that started in late April. Moreover, the pair is now approaching the 1.3715 area, which acted as a very important swing area in the past.
The Pound (Gbp/Usd) declined already 90 pips during the Asian session, even though yesterday, on Monday, the pair looked somehow resilient against the dollar’s strength. During the Asian session, the pound lost 90 pips down to TheLFB S1 (1.6210) and broke below the low touched on Monday.
The Aussie (Aud/Usd) lost almost 60 pips tonight, during the Asian trading hours, adding to the strong decline seen just one day prior. Moreover, the pair opened Tuesday’s trading session below the 20-day moving average for the first time since late April. However, the pair re-tested the same moving average as a release showed that the RBA does not see the case for any further rate cuts.
The Cad (Usd/Cad) advanced 40 pips tonight, as crude oil continues to tumble. For now, the cad is trading just above the 23.6% retracement area from the downtrend that has lasted since March. As the market remains in risk-aversion mode, the cad’s outlook remains to the upside.
The Swissy (Usd/Chf) gained another 40 pips during the Asian trading hours, extending the trend seen on Monday. However, the pair still looks unable to break above the 1.0950 resistance area, where it also topped in the previous day of trading.
The Yen (Usd/Yen) saw very strong momentum during the Asian session, as the market prepares for the Bank of Japan to announce its new monetary decisions. The yen lost 100 pips during the Asian trading hours, breaking below the trend-line that connects the 06.05 and the 06.11 lows.
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