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Overall, the dollar strengthened during the European session, as the S&P futures moved lower, towards the 930.00 support area. While the S&P futures managed to find a bottom somewhere near the U.S. open, the major currencies started to retrace most of the declines seen earlier in the day, and formed a number of pattens on the 4 hour and daily charts, which may suggest that the current downturn has hit its bottom. As a note, every major pair except for the yen tested the 20-day moving average on Monday.
The Euro (Eur/Usd) lost 150 pips during the overnight session, but regained some of the ground loss throughout the U.S. trading hours. In its decline, the euro tested the 20-day moving average and at the same time the 1.3800 support area. The euro-area calendar was clear of any important releases on Monday, and will be over the next few days , which may affect the market due to the lack of momentum.
The Pound (Gbp/Usd) is currently the only pair that managed to advance against the dollar during Monday’s trading session. So far, the pair gained almost 250 pips since the late European session, reversing 150 pips near Sunday open. On the daily chart, the pound appears to be forming a pin-bar formation.
The Aussie (Aud/Usd) fell as much as 150 pips during the overnight session, testing the 20-day moving average. However, the test was rejected , which caused the aussie to trade in a 50-pip range and swing around TheLFB R1 (0.7855) during the U.S. session.
The Cad (Usd/Cad) tested the 20-day moving average and at the same time the 23.6% retracement area from the March downtrend , during the European session. Similar to the other major pairs, the cad retraced the earlier gains during the U.S. session. On the daily chart, the cad appears to be forming a doji-star pattern. In the early U.S. session, a release showed that housing starts reached 128K in May, one of the weakest numbers on record.
The Swissy (Usd/Chf) gained approximately 150 pips during the European session, reaching the highest value over the last two weeks of trading and breaking briefly above the 20-day moving average. However, during the U.S. session, the swissy started to slowly retrace the gains seen previously, inline with the other major pairs.
The Yen (Usd/Yen) was unable to pull any important moves during Monday’s trading session. Throughout the European and the U.S. sessions, the yen traded side-ways, in a 45 pips range. On the daily chart, the yen remains trading slightly below the 99.00 resistance area.
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