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Overall, Friday’s forex session was very interesting. For the second time this week, and for the first time over the last few months, the major pairs moved without much support from the global market. Recently, the global markets (cash and futures equity, forex, commodity, bonds) moved as one, having a relatively high degree of correlation. However, this was tested over the last few days, as it seems that each market had its own fundamental driver. In the case of the forex market, the cause seems to be international outflows, central banks interventions and automated orders. Interesting enough, euro, pound and swissy declined, while the aussie and the cad traded relatively flat – as happened earlier this week.
The Euro (Eur/Usd) lost 60 pips overnight, shedding the pips gained in the previous session. The decline comes after the euro traded around the 1.4180 area, a resistance that has held the pair for more approximately 6 weeks. For now, the euro is trading above all the important daily chart simple moving averages.
The Pound (Gbp/Usd) is trading just above TheLFB S2 (1.6300) area, with the pound losing nearly 150 pips during the overnight session. The pound, together with the euro, had a shy attempt to move higher near the London open, but the move was easily rejected.
The Aussie (Aud/Usd) was sold sharply during the Asian session, but since then the pair traded in a 30 pip range, holding above TheLFB S1 (0.7980). This happened, even though the euro and the pound continued to decline at a sustained pace throughout the rest of the overnight session.
The Cad (Usd/Cad) continues to trade within the range of the previous day of trading, even though some of the major currencies declined at a strong pace compared to the dollar. Earlier this week, the cad lost nearly 450 pips, being the only pair that managed to develop a trend at that time. The CPI read at 07:00 EDT will test that move.
The Swissy (Usd/Chf) gained 50 pips, and tested TheLFB R1 (1.0780) during the overnight session, as the dollar strengthened across the board. On the daily chart, the swissy has been trading roughly within the same range over the last few weeks, something that denotes the market’s uncertainty in valuing this pair.
The Yen (Usd/Yen) traded most of the time between the neutral pivot point (93.80), but above the trend-line that connects the Jul 13 09 and the Jul 16 09 highs. On the daily chart, the pair still swings around the 93.50 area, which is an important price point for the yen’s behavior.
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