Overall, the currency market started off relatively strong in the Asian session, shedding the dollar at a sustained rate. However, following the pattern set over the last period, the market may loose its momentum as it heads into the London open. The calendar for the two main areas of trading, Euro-area and the U.S., is light today, but there are two important releases coming out of Canada.
The Euro (Eur/Usd) is setting the trend tonight, as it advances 75 pips after the Sunday open. Furthermore, the euro managed to break tonight above the 1.35 area, where it topped on Thursday and Friday. This week, the euro’s calendar is very light with no top-tiered releases scheduled.
The Pound (Gbp/Usd) opened higher for the sixth consecutive day. The pound gained almost 60 pips since the Sunday session opened, trading just under TheLFB R1 (1.4905). However, from the current area, the pound will need strong momentum to advance as it approaches new highs from the the last three months of trading. Later this week, the BoE is expected to hold interest rates at 0.50%.
The Aussie (Aud/Usd) is approaching an important swing point area that it has been hanging around over the last two days of trading, and the past couple of months. On Thursday and Friday the aussie struggled to break above the 0.72 level, an area that it has been trying to push through since the middle of October.
The Cad (Usd/Cad) fell 50 pips since the open. The pair declined tonight for a fourth consecutive trading day, after it bounced off the 1.27 area. Fundamentally, the Canadian dollar strengthened on weak U.S. data and a strong commodity market.
The Swissy (Usd/Chf) is once again approaching the 200-day simple moving average, as the pair declined relatively strongly over the last few days. In particular, since the Sunday session started, the swissy fell 40 pips down to TheLFB S1 (1.1275).
The Yen (Usd/Yen) followed the same patten from the last period, and opened strongly in the Asian session. The yen advanced 50 pips at the start of Sunday trade. The pair reached its highest value since October 21 tonight due to the strong gains seen during the last week of trading.