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Overall, the European pairs (euro, pound and the swissy), surged higher during the London open, however, this move came to a halt, after the
global financial markets did not follow the forex route; neither the cad, aussie or the yen. S&P futures traded side-ways at best during the overnight session, while crude oil and the European cash markets posted only small gains. For now, the major pairs are looking for a direction, something that might not come until the 8:30am EDT U.S. releases. 

The Euro (Eur/Usd) surged 100 pips shortly after the London, to reach TheLFB R2 (1.4070). With these gains, the euro managed to break decisively above the 20-day moving average, which has acted as the main swing point over the last few weeks of trading. However, now, the single-currency has to break above the 1.4050 area, something that it could not manage to achieve for almost two weeks now.

The Pound (Gbp/Usd) had a strong European session, but still the pair was unable to break and hold above the 20-day moving average. During the European session, the forex market had to digest the U.K. labor market reports, which showed that the unemployment rate jumped to 7.6%, currently being at multi-year highs. At the same time, the claimant count increased by 23.8K in June, to reach the highest numbers since 1997.

The Aussie (Aud/Usd) had a 20-pip range throughout the first part of the overnight session, but as was the case with the other major pairs, the aussie started moving only after the European session opened. Moreover, the aussie managed to break above the 20-day moving average tonight.

The Cad (Usd/Cad) had probably one of the weakest Asian sessions on record tonight, but the pair gained some additional momentum after the London open. However, this was still not able to move the cad, but still, the pair is likely to catch up as the market is heading towards the U.S. session. It is absorbing two days of moves, not backed by the other major pairs.

The Swissy (Usd/Chf) cam to a standstill during the late Asian session, but the London open sent the pair almost 100 pips lower. For now, the swissy is trading back within the same 1.0750-1.0900 range, characterized by sudden moves and a lot of noise. During the European session, a report showed that retail sales dropped 1.4% in May, much more than expected.

The Yen (Usd/Yen) continued to side-ways throughout the overnight session, searching for a direction. During the early European session, the BoJ decided to maintain the key interest rate at 0.10%, but extend it commercial lending facilities. In addition, the bank also reduced the growth forecast for 2009, which should not be seen as a big surprise.

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