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Overall, the major currencies were a major disappointment during the U.S. trading hours. The currency market failed to advance against the dollar on Thursday, even though S&P futures had one of the strongest days of trade in the last few months, while crude oil gained $2 in just a few hours, both of these two being historically U.S. dollar negative. Moreover, some traders are suggesting that the forex market is looking rather fatigued right now, and a retracement of the recent rally might be needed in the currency market. Ahead, the global equity market is likely to retain its strong momentum, but trade desks may not be convinced that this will influence the forex market in any way. 

The Euro (Eur/Usd) failed, for a fourth consecutive day, to break higher, even though the global markets bought risk at a very strong pace during the U.S. trading hours. The pair advanced 80 pips throughout the early U.S. session, but this move was easily retraced just a few minutes later, even though the S&P futures were heading towards the highest value touched since November 2008. For now, the euro is trading near the Asian open price, and at the same time, slightly above the 1.4175 support area. 

The Pound (Gbp/Usd) approached the 1.6600 area during the U.S. session, but the pair’s momentum was too weak to follow through and hold the move higher. As such, the pound was forced to retrace some parts of the move, and fell again below TheLFB R1 (1.6540), which played a very important role during the intra-day session. During the European session, a report showed that retail sales increased 1.2% in June in the U.K., much more than expected. 

The Aussie (Aud/Usd) advanced as much as 70 pips throughout the first part of the day, but, as soon as it hit TheLFB R1 (0.8215), the pair started retracing the moves set earlier in the day. Over the last two trading days, the aussie lacked a clear direction of trading, and formed two small doji-star patterns on the daily chart, which usually denote the market’s indecision. 

The Cad (Usd/Cad) saw a 40-pip range throughout the Asian and the European sessions, but tumbled at a very strong pace during the U.S. trading hours. This happened, as the market anticipated the BoC pres conference, in which the Governor said that the economy is going to expand in the third quarter, and that the pace of contraction is slowing. Interestingly enough, the cad and the yen are the only two pairs that did not retrace the moves seen earlier in the day.

The Swissy (Usd/Chf) had a relatively calm overnight session, but the swissy hit a very volatile patch as the U.s markets got underway. The pair surged 110 pips during the European session, retraced every pip in just a few hours, and then reversed higher again, to advance by 80 of the initial 110 pips. 

The Yen (Usd/Yen) surged higher on Thursday, helped by the rally seen in the equity markets. Since the beginning of the Asian session, the yen gained 160 pips, having the strongest trading day since early June. However, the yen is heading towards the resistance area formed by the 200 and by the 50-day moving average, which might halt some of the pair’s momentum. This is the first session in a while that the pair linked itself heavily to S&P futures moves.

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