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Overall, the currency market reversed most of the declines seen during the European session throughout the U.S. trading hours. This happened as the S&P futures headed to the break-even line, and even traded above it for a while. For now, the major currencies appear to be forming a number of bullish patterns on the daily chart, which is usually reflected in dollar weakness over the next few trading sessions. Ahead, the Asian session expects a very important report, the interest rate decision coming from the RBA, which will probably affect the market’s behavior.
The Euro (Eur/Usd) sold off at a strong pace during the European session, but reversed throughout the U.S. session, as the S&P futures headed to the breakeven line. On the daily chart, the euro is still trading below the 20-day moving average, but this level may fail relatively easily if the Asian and the European markets trade into the green territory.
The Pound (Gbp/Usd) is currently forming a large bullish pin-bar formation on the daily chart, as the pair lost as much as 200-pips during the first part of the day, but regained a good deal of the ground loss earlier throughout the U.S. session. The pound had a light economic calendar on Monday, with more reports coming on Tuesday.
The Aussie (Aud/Usd) had, to some extent, evidence of weaker volume than the other major currencies on Monday as the market prepares for the interest rate decision. Investors expect the RBA to maintain the policy rate at 3.00%, the highest level among the major currencies.
The Cad (Usd/Cad) managed to break above the 1.1630 level after the London open, but then fell back again below the resistance area throughout the U.S. trading hours. The 1.1630 area represents an important swing point for the pair’s behavior, which has held the cad for more than a week at this area.
The Swissy (Usd/Chf) rose sharply throughout the European session, and tested the 100-day moving average, but with the same strong pace, the pair shed most of the gains seen earlier in the day. On the daily chart, the swissy appears to be forming a bearish pin-bar formation.
The Yen (Usd/Yen) declined as much as 140 pips on Monday, posting the biggest declines over the last few weeks of trading, however, the market managed to reverse almost half of those declines during the U.S. session. The yen’s weakness came, as the market appears to be in risk-aversion mode, which usually empowers the Japanese yen and the U.S. dollar.
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