Overall, the cad, aussie and the swissy broke above very important swing points in the last day of trading, providing again clear evidence that the market is looking for high yielding assets. This comes after the market stayed for almost a year in a risk-aversion mode, as institutional traders balanced their risk exposure. The market may still have some dollar-runs, but these moves will be smaller and may easily turn before they even have a chance to run.
The Euro (Eur/Usd) gained 140 pips on Monday, as the dollar sold off across the market. The pair found the strength to reverse a 140 pip decline during the European session, helped by the U.S. futures, which provides valuable support to the currency market. As such, most of the gains came during the U.S. session, but the euro shed some ground during the Asian trading hours.
The Pound (Gbp/Usd) advanced for the fifth consecutive day on Monday, probably helped by the upcoming BoE interest rate decision. However, the pound moved lower during the Asian session, falling nearly 40 pips. The pound found additional support from the housing market in the last period, something that was reflected in the pair’s charts.
The Aussie (Aud/Usd) reached the highest value in the last six months of trading tonight, as the currency market is preparing for the interest rate decision. The RBA is expected to hold the key interest rate at 3.00%, as the Australian economy is currently projected to resume its growth path in the second part of the year.
The Cad (Usd/Cad) fell nearly 500 pips over the last four days of trading, from which 150 pips came during Monday’s trading session, when the cad broke under the 200-day moving average for the first time in almost a year. Additionally, the declines seen over the last period helped the cad reach the lowest valuation since November 2008.
The Swissy (Usd/Chf) was able for the first time in the last few months to make a strong break under the 200-day moving average. The swissy fell on Monday 100 pips, moving in-line with the euro and the S&P futures. During the Asian session, the swissy extended the 20-pip range observed in the U.S. trading hours.
The Yen (Usd/Yen) declined 40 pips in the last day of trading, on Monday, even though the major pairs posted gains compared to the dollar and the S&P futures. Additionally, the yen struggled in tonight’s Asian session to break under the 98.75 area, the low of the last day of trading.