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Overall, the forex market moved hand in hand with the S&P futures during the U.S. session. The major pairs surged during the U.S. open, as the S&P futures tested the 955.00 area, but soon after the S&P futures and the currency market started to move lower. For now, the major pairs are sitting near very important price points levels, which require strong momentum in order to move. This means that the major currencies will not be able to move higher without having the S&P futures follow, supporting the breakout attempt.
The Euro (Eur/Usd) failed to pull any important moves overnight, except for a small attempt to break the 1.4250 area, which in the end proved to be unsuccessful. For the rest of the day, the euro moved around the neutral pivot point (1.4195) on a light volume. Most likely, the euro will need very strong momentum to break higher.
The Pound (Gbp/Usd) was the worst performer of the overnight session, as the pair plunged 150 pips. The U.S. open helped the pair retrace a few pips, but then the pound resumed its downward path, in-line with the other major pairs. On the daily chart, the pound is trading just above the 20-day moving average, which could provide strong support during the upcoming Asian session.
The Aussie (Aud/Usd) moved in similar fashion with the euro during the last few trading sessions, something that does not happen too often. The pair moved most of the time up and down around the neutral pivot point (0.8115), but at one time, during the early U.S. session, the aussie had a failed attempt to break above the high reached on Monday. If the pair does manage to break higher, it will have a path towards the 0.8250 area, the high of the current year.
The Cad (Usd/Cad) showed a lot of strength during the early overnight session, as it was the only major pair that managed to hold against the dollar, in a period when the other currencies declined. This happened, as the cad was preparing for the BoC interest rate decision. During the U.S. session, the cad declined 120 pips, but the move was easily reversed after the S&P futures turned around. For now, the cad appears to be forming a pin-bar pattern on the daily chart.
The Swissy (Usd/Chf) traded in a 20-pip side-ways channel during the overnight session, slightly below the neutral pivot point (1.0700), but the swissy managed to move lower during the early U.S. hours. The downside move was short-lived, since the swissy retraced much of the breakout attempt, and is now trading once again within the overnight range.
The Yen (Usd/Yen) gained a few pips during the European session, but declined sharply in the U.S. session, together with the S&P futures. The pair lacked the momentum to break below the 93.25 area, where it has also bottomed over the last few days. Ahead, the yen’s outlook lies to the upside, as long as the S&P futures stay in the green.
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