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Overall, the currency market failed to trend during the European session, but may develop a trend throughout the U.S. trading hours, as the economic release calendar is loaded with important news reports. During the overnight session, the market moves were mostly influenced by regional strength and weakness. As such, the euro and the cad were the only two pairs that managed to pull a number of bullish moves against to the dollar, while the other major currencies, especially the Japanese yen, moved lower. Trading remains choppy and range-bound, with order flows that are intermittent and unreliable. The markets are dealing with sporadic block orders that are being fed through in a low volume environment as the books get set for the start of Q3 and H2.

The Euro (Eur/Usd) traded in a 40-pip range during the early part of the overnight session, but managed to move higher, in-line with the S&P futures during the European session. Moreover, the euro was among the only pairs that showed resilience to the dollar’s strength during the London open, something that denotes the pair’s strength. 

The Pound (Gbp/Usd) failed again to sustain a trend during the overnight session, something that appears to be a pattern lately. The pound moved lower overnight, but the only managed to swing around in a 50-pip range, around Tuesday’s lows. Economic reports from the U.K. signaled that manufacturing activity, although still in contraction, reduced the rate of decline.
The PMI read increased to 47.00 in the U.K in June. This denotes a very dynamic recovery in the U.K. manufacturing sector, since the index gained almost 13 points in just 5 months. 

The Aussie (Aud/Usd) had probably one of the weakest overnight sessions of the last few weeks this Wednesday. The pair moved in a 25-pip range, but still, it had a shy attempt to break lower during the London open; a test that was quickly retraced. 

During the Asian session, a release showed that retails sales rose twice as much as expected, while the number of building approvals declined by a surprising 12.5% in May, which was much worse than expected.  

The Cad (Usd/Cad) had relatively weak momentum overnight, ahead of the Canada Day public holiday. The pair tried briefly to move higher during the first part of the overnight session, but was rejected with ease, from the 1.6500 level. After the London open, the pair started heading lower, and now it is trading 45 pips below the Wednesday’s open.

The Swissy (Usd/Chf) traded in a side-ways channel during the Asian session, but broke a few pips lower during the London open. The breakout attempt was short-lived, and the swissy quickly went on to hit the 20-day moving average, which sent the pair, once again, higher. 

The Yen (Usd/Yen) gained a quick 70 pips during the Asian session, but since then has swung around TheLFB R1 area at 96.75. For now, the yen is trading near the resistance area formed by the 20, 50 and the 100-day moving averages. During the Asian session, the quarterly Tankan release showed that the manufacturing side of the Japanese economy is still in a deep contraction phase, something that puts downside pressure on the Japanese yen

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