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Overall, the major currencies surged against the dollar as investors are again thinking that the global economy is heading towards recovery. This, in turn, has investors dropping their U.S. dollar denominated assets in the favor of higher yielding assets, denominated in foreign currencies. The currency market may test the highs reached at the beginning of June, as the dollar’s outlook lies to the downside.
The Euro (Eur/Usd) surged 180 pips throughout the second part of the day, on Tuesday, as the S&P futures were struggling to break above the 941.00 resistance area. The euro’s uptrend started just before the U.S. open, even though the euro lost a few pips during the overnight session.
The Pound (Gbp/Usd) rose as much as 300 pips during Tuesday’s trading session, having probably one of the strongest days of the current year. Most of the gains came during the late European session and throughout the U.S. trading hours, similar to how the other major pairs performed today. During the overnight session, a report showed that house prices rose 1.1% in May from the preceding month.
The Aussie (Aud/Usd) was today’s top performer, gaining 150 pips or almost 2%, the most in percentage terms among the major pairs. Moreover, helped by the gains seen on Tuesday, the aussie recovered the ground loss in the previous two days of trading, and even advanced a few more pips.
The Cad (Usd/Cad) tested the neutral pivot point during the early Asian session, but soon after the pair started heading lower. The cad declined as much as 160 pips, after the pair formed a pin-bar bouncing off the 20-day moving average on Monday.
The Swissy (Usd/Chf) fell more than 150 pips during the late European and the U.S. sessions on Tuesday. During the second part of the U.S. session, the swissy traded sideways near the 1.0800 area, where the pair met the trend-line that connects the 04.22 and the 05.07 highs. However, the pair resumed its decline as the S&P futures headed towards the 945.00 area.
The Yen (Usd/Yen) headed only lower during Tuesday’s trading session, declining nearly 130 pips. During the U.S. session, the pair broke below the support trend-line that connects the 03.19 and the 04.28 lows and at the same time below the 50-day moving average.
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