Overall, the negative S&P futures pulled the dollar index and the yen higher in the last day of trading, on Monday. The dollar gained ground against every other major currency, except for the yen, which is very reactive to the market’s overall risk stance. During tonight’s Asian session, the major pairs traded side-ways with no exception. Additionally, the lack of any important releases greatly reduce the market liquidity on Monday, something that may not be the case on Tuesday.
The Euro (Eur/Usd) declined 80 pips on Monday, in a day when the dollar index re-tested the previous support area. The euro sold off during the European and the U.S. sessions, as the negative S&P futures forced institutional traders to reduce their exposure to riskier assets, such as foreign currencies. The next important swing area for the euro will be in the 1.3640 area, where it topped six weeks ago.
The Pound (Gbp/Usd) also declined in the previous day of trading, on Monday. Most of the declines came during the European session, while it moved side-ways during the Sunday session and during the U.S. trading hours. In tonight’s Asian session, the pair extended the range seen in the late U.S. session.
The Aussie (Aud/Usd) bounced on Monday morning from a seven month high, as the dollar strengthened across the board. Consequently, the aussie dropped 130 pips, falling for the first time in the last nine days of trading. During the Asian session, the aussie tried to take out the low reached on Monday.
The Cad (Usd/Cad) traded relatively flat in the early part of the overnight session, on Monday morning, but soon after the cad took off heading higher. At the end of the day, the cad rose 170 pips, paring the declines seen on Friday. During the Asian session, the pair struggled to break above the high made on Monday.
The Swissy (Usd/Chf) saw weak momentum during the first day of the week, on Monday, but this did not stop the pair from adding 60 pips as the dollar strengthened against almost every other currency. During tonight’s Asian session, the yen extended the 20-pip range seen in the late U.S. session.
The Yen (Usd/Yen) broke under the support area formed by the 20,50 and by the 200-day moving averages on Monday, as the Japanese yen was pulled higher by S&P futures. During tonight’s Asian session, the yen moved side-ways even though the S&P futures lost further points, as the pair tried to stabilize.