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Overall, the dollar strengthened across the market board during the U.S. trading hours, as the S&P futures and crude oil posted important strong declines. Every major currency declined against the dollar and the Japanese yen, sending some of the major currencies to the lowest value of the last few trading sessions. Most likely, the forex market will remain driven by risk-aversion over the next few sessions, as long as equity traders fail to send the stock market’s valuation higher.
The euro (Eur/Usd) tested the 1.4300 area and at the same time, the high reached on Monday, during the European session but the pair failed to move any higher. Soon after, the currency market entered into a risk-aversion mode, which pretty much sawcaused every major pair to dropping at a sustainable pace. Ahead, the euro will most likely probably continue to retrace some of the recent gains in order toas it gathers the necessary momentum to break above the 1.4300 area.
The pound (Gbp/Usd) is currently trading slightly above the 1.6400 area, which represents the support area of the last few days of trading. If the pound will moves lower, the pair might may test the support area formed by the 20 and by the 50-day moving averages, which has held the pair over the last period.
The aussie (Aud/Usd) surged a little more than 100 pips during the overnight session, as the RBA projecteds that the economy will recover within the next few quarters. However, the aussie topped near TheLFB R2 (0.8325) during the European trading hours, at a time when the dollar was advancing against the other major currencies. Since then, the pair has reversed every pip seen earlier in the day, trading once again near the Asian open price.
The cad (Usd/Cad) tried to break below the 1.0800 area during the intra-day session, but the pair lacked the required momentum to sustain the downside momentum. However, around the London open, the cad declined around 60 pips, reaching the lowest value of the last year of trading, but soon after, the cad reversed in line with the overall direction of the forex market.
The swissy (Usd/Chf) followed a similar pattern as seen in the prior session’s trade, but this time, the risk-aversion reaction was much stronger, sending the trend higher, for longer. followed a similar pattern of trading as in the prior day of trading, but only this time, the risk-aversion phase was much stronger. On Tuesday, the swissy declined throughout the overnight session, but surged higher during the U.S. trading hours. For now, the swissy is trading near the 1.0750 swing area, and at the same time, near the 20-day moving average.
The yen (Usd/Jpy) bounced from the 200-day moving average on Tuesday, something that was widely expected, some are sayingsince it has failed to break through the 200-day moving average several times now. Moreover, the yen’s downtrend was enhanced by the falling S&P futures, which are down nearly 1% at this point. For now, the yen has managed to find a temporaryily support near the 94.30 area, where the 20-day moving average can also be found.
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