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Overall, the major currencies used the Asian session to retrace some of the gains posted in the prior two trading sessions. However, the downside move might come to a halt, since the S&P futures are still trading flat so far, while the Asian markets are up by a little more than 2% tonight, something that suggests the global markets are still tolerant to risk. It is important to note though, that the uptrend seen on Wednesday started in the fx market and only after spread across the other classes of assets.
The Euro (Eur/Usd) tested the trend-line that connects the 06.03 and the 07.01 highs during the last U.S. session, but it failed to break any higher. This has caused the euro to retrace some of the ground it gained in the prior day, but still, the declines are relatively small.
The Pound (Gbp/Usd) is trading just below the neutral pivot point (1.6395) after it declined a little more than 50 pips during the Asian session. In addition, the pound broke tonight below the support trend-line that held the pair over the last three days of trading, something usually seen as negative.
The Aussie (Aud/Usd) declined 50 pips tonight, retracing almost half of the pips gained in the previous day of trading, on Wednesday. During the last U.S. session, the aussie tested the 0.8050 area, but so far it seems the pair is unable to break above it.
The Cad (Usd/Cad) had a similar pattern of trading throughout the Asian session this week. The pair had very weak momentum during the Asian session, but then it started declining very fast during the second part of the day. Tonight, the cad seems to follow the same pattern, since the pair’s momentum is very thin. However, despite this, the cad still managed to retrace 65 pips.
The Swissy (Usd/Chf) sold off at a strong pace on Wednesday, as the dollar weakened across the market. During tonight’s Asian session, the swissy bounced from the 1.0750 area and recovered some of the pips it lost in the prior sessions. In order for the pair to move anywhere decisively, the swissy has to break free from the 1.0750-1.0900 area.
The Yen (Usd/Yen) declined 40 pips throughout the Asian session, but then the pair surged higher again to test Wednesday’s high. Moreover, the yen is trading just above a support trend-line that holds the pair since 07.13. If the yen breaks lower, it might retrace some of the gains it has posted recently.
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