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Overall, the currency market advanced a limited amount of pips against the dollar tonight, during the Sunday session. Following the previous three days of trading, almost every pair is sitting at an important support level, which sustained the upside movement seen over the last few weeks of trading. What will happen in the following few sessions of trading will certainly influence the market for a longer period, since the major currencies are sitting near important swing areas. If the majors break lower, the market may retrace the recent dollar’s decline.
The Euro (Eur/Usd) bounced off the support area that held the pair since late April. The euro gained 50 pips, being one of the few pairs that moved decisively throughout tonight’s Sunday session. This week the Euro-area calendar is free of top-tier releases, something that may affect the pair’s momentum.
The Pound (Gbp/Usd) lost more than 600 pips over the last three days of trading as the market is penalizing the unstable U.K. government. This caused the pound to be the worst performer over the last period. Currently, the pound is trading near the 1.6000 area, which acted as an important swing area in the past.
The Aussie (Aud/Usd) gained 50 pips throughout tonight’s Asian market, as the pair bounced off the support trend-line that connects the 04.28 and the 05.18 lows. On the daily chart, the aussie is trading just near the 50% retracement of the downtrend that lasted from July to November 2008, known as the market’s credit crisis selling, or as the market’s risk aversion phase.
The Cad (Usd/Cad) advanced approximately 200 pips on Friday, even though crude oil managed to hold its value around the $68 area. The cad had been in a very strong downtrend over the last two weeks, declining in 11 occasions out of the last 15 days of trading. However, the cad started to retrace some parts of the move, as the market follows a wave-like structure.
The Swissy (Usd/Chf) gained 160 pips on Friday, the most in a month. The swissy had no clear direction in the Asian and European sessions, but started to head higher during the news reports at 8:30am EST. On the daily chart, the swissy is trading just above the trend-line that connects the 04.22 and the 05.07 highs. In tonight’s Asian session, the swissy bounced off the 20-day moving average, and declined 30 pips.
The Yen (Usd/Yen) advanced strongly on Friday, after the Non-farm Payroll release. The pair traded side-ways during the overnight session, but surged almost 200 pips during Friday’s U.S. session, breaking above the resistance trend-line that connects the 04.06 and the 05.07 highs. The 99.00 area is the next major resistance point the yen has to break through.
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