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Overall, the currency market traded cyclically on Tuesday as investors switched from risk-tolerance to aversion from one session to the other. As such, the dollar declined relatively strongly during the Asian session, traded side-ways in the European market, but strengthened during the U.S. open. Throughout the late U.S. session, the currency market just consolidated in to a small range.
It is important to note that the major pairs were still able to hold near very important areas against the dollar on Tuesday, even though crude oil declined at a strong pace, while the U.S. futures market is currently trading into the red. This suggests that the market is becoming resilient to the allure of the safety status of the dollar, in reaction to the U.S. Treasury is printing huge amounts of debt.
The Euro (Eur/Usd) traded side-ways during the European session, but fell as much as 130 pips during the U.S. trading hours. Additionally, the pair managed to bottom near the 20-day moving average, which has acted as an important swing point area over the last few days of trading. During the European session, a release showed that the year-over-year inflation read dropped to -0.1%, the lowest level on record.
The Pound (Gbp/Usd) saw a very volatile day on Tuesday. The pair surged during the London open, reaching a new high for the current year. Even so, most of these gains were quickly shed after a release pointed out that the first quarter GDP contracted 2.4%, much more than expected. During the U.S. session, the downside movement continued as the pound dropped a little more than 300 pips from the high reached during the intra-day session.
The Aussie (Aud/Usd) is currently forming a bearish pin-bar on the daily chart, as the pair bounced from an important resistance area. Most traders see pin-bars as reversal patterns, something that will probably affect the pair’s behavior over the next few sessions.
The Cad (Usd/Cad) was able to develop and sustain a trend on Tuesday for the first time over the last few days of trading. This happened as crude oil saw a very volatile day, which may have forced the cad to move finally.
The Swissy (Usd/Chf) moved lower during the first part of the day, but then retraced every pip lost earlier and even advanced a few more. For now, the swissy is trading just above the neutral pivot point (1.0850) area, 30 pips above Tuesday’s open.
The Yen (Usd/Yen) bounced from the trend-line that connects the 06.19 and 06.25 highs during the first part of the day, something that caused the yen to decline as much as 100 pips. However, during the U.S. open, the yen turned around and broke above the resistance level. During the late U.S. session, the yen consolidated slightly below TheLFB R1 (96.45).
During the Asian session, a release showed that consumer-spending picked up in Japan for the first time in a year, but still the unemployment rate surged to the highest rate observed over the last five years.
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