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Overall, the major currencies saw a number of weak signs of strength during the Asian session, as the market extended the gains observed throughout the U.S. trading hours. For now, the currency market appears to have hit an important swing area, since almost every pair formed a pattern similar to a doji star/pin-bar, something that suggests the market may need more momentum to move anywhere lower.
The Euro (Eur/Usd) is currently trading slightly above the 20-day moving average, even though it broke below it on Monday. Throughout the U.S. and the Asian sessions, the euro was able to retrace a substantial part of the decline seen on Monday, forming a pin-bar formation on the daily chart.
The Pound (Gbp/Usd) and the cad were the only pair that strengthened against the dollar on Monday. The pound lost 150 pips during the European session, but started to head higher as soon as it hit the 20-day moving average. For now, the pound appears to have formed a pattern similar to a pin-bar formation. During the Asian session, the pound re-tested the high reached on Monday.
The Aussie (Aud/Usd) tested the 20-day moving average on Monday, but the market rejected the pair with ease. During the U.S. and the current Asian sessions, the aussie moved slightly higher, retracing some of the declines seen in the previous day, on Monday.
The Cad (Usd/Cad) formed a pin-bar formation on the daily chart, as the pair failed to hold its value throughout the U.S. session. For now, the cad’s outlook lies once again to the downside, helped by crude oil, which has also managed to recover from a strong decline on Monday.
The Swissy (Usd/Chf) rose as much as 150 pips on Monday, but retraced back half of the ground gained earlier during the U.S. session. In the Asian session, the pair fell 20-pips to re-test the 20-day moving average.
The Yen (Usd/Yen) was unable to pull any important moves during Monday’s trading session. Throughout the trading day, the yen traded side-ways, in a 45-pip range. On the daily chart, the yen remains trading slightly below the 99.00 resistance area.
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