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Overall, the European currency session was very interesting on Monday. The major currencies declined during the European trading hours, even thought the S&P futures moved side-ways most of the time. However, the dollar and the yen strengthened across the board as crude oil declined, and as the overnight spot markets fell as much as 1.5%. The major equity indexes from Europe reached the lowest value since late April on Monday, something that makes some traders abandon the equity markets for Treasuries, thus empowering the greenback.
The Euro (Eur/Usd) broke below a trend-line that held the pair up for almost 3 weeks during Monday’s session, after the pair tumbled 70 pips throughout the European session. The euro’s release calendar was almost empty this morning, failing to provide any aide or support to the single-currency.
The Pound (Gbp/Usd) opened the Sunday session with a 20-pip gap, which allowed the pair to break under the low of the prior two days of trading. During the Asian trading hours, the pair traded relatively flat but shortly after the London open, the pound started moving only lower. So far, it has lost nearly 200-pips, being the session’s worst performer, and broke below TheLFB S3 (1.6150).
The Aussie (Aud/Usd) had a weak attempt to break above the neutral pivot point (0.7960) during the London open, but the test was easily rejected. From there on, the aussie started heading lower, which allowed the pair to reach the lowest value in almost two weeks. On Tuesday morning, the RBA is expected to maintain the key interest rate at 3.00%, the higher among the major pairs.
The Cad (Usd/Cad) seems to have lost its correlation with crude oil over the last few days of trading; the raw material declined very strongly for the last five days, while cad only posted modest gains over the same period. Tonight, cad gained 30 pips and broke above the 1.1630 resistance area.
The Swissy (Usd/Chf) had a 20-pip range during the Asian session, but gained as much as 50 pips during the European trading hours. In addition, the swissy managed to break above the 1.0900 level, which was a very important swing point over the last few weeks of trading.
The Yen (Usd/Yen) declined 80 pips very quicklyduring the Asian session, breaking the TheLFB S3 (95.25) area. During the European session, the yen managed to decline a few additional pips, but overall the pair moved side-ways. For now, the yen is struggling to break below the trend-line that connects the Jun 23 09 and the Jun 26 09 lows.
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