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Overall, the currency market lacked a clear direction during the European session, as expected. Throughout the Asian trading hours, the major pairs retraced some of the ground gained on the previous day, but the downside move failed to continue during the European session, as the global markets traded side-ways. Ahead, unemployment claims and the TIC reports are scheduled, but chances are that these reports will have a small effect in the market, as traders will probably focus on the earnings reports.
The Euro (Eur/Usd) had a 20-pip range during the European session, trading above the neutral pivot point (1.4065). In order the move higher, the euro will have to face a trend-line that held the pair since the beginning of June. If the euro breaks above this price point, a test of June’s high is very likely to come over the next few days.
The Pound (Gbp/Usd) spent most of the overnight session trading below the neutral pivot point but slightly above the 20-day moving average. In the longer tem, the pound may start to under-perform the other major currencies, unless the economic outlook picks up rather quickly, as the U.K’s fundamentals appear to be the weakest.
The Aussie (Aud/Usd) fell to the 20-day moving average during the Asian session, but since then, the pair has mostly traded side-ways. Over the last few days of trading, the 20-day moving average has been an important swing point, which allowed investors to use this area to exit the market.
The Cad (Usd/Cad) managed to retrace higher as much as 70 pips during the Asian session, but the pair spent the rest of the overnight session swinging around the neutral pivot point (1.1195). To some extent, today’s retracement was widely expected, after the cad declined very strongly over the last three days.
The Swissy (Usd/Chf) had had a weak overnight session, in which the pair was able only to advance 40-pips, to test the neutral pivot point (1.0785). Over the last few weeks of trading, the swissy developed a tight range in the 1.0750-1.0900 area. In order to move anywhere of importance the swissy would have first to break below or above that range.
The Yen (Usd/Yen) moved lower most of the time during the overnight session, even though the rest of the major pairs had a relatively flat European session. For now, the yen is once again testing the 93.50 area, after it broke higher in the previous day’s trade.
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