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Overall, the dollar showed some signs of the strength during the Asian session, even though the dollar index moved very little. However, the real gainer of the Asian session was the yen, which strengthened across the board as the Japanese index Nikkei is down approximately 1.5%. Ahead, the market may remain in risk aversion mode throughout the European session as the S&P futures and crude oil continue to decline.
The Euro (Eur/Usd) moved relatively flat, even though the other major currencies declined compared to the dollar shortly after the London open. On the daily chart, the euro trades in a very volatile area trapped below the 20-day moving average, but above the resistance trend-line, that connects the 06.16 and the 06.23 lows.
The Pound (Gbp/Usd) opened the Sunday session with a 20-pip gap to the downside, which propelled the pair below the closing price from the prior two days of trading. For today, the pound’s outlook lies on the downside, as the S&P futures and the cash equity markets remain trading below the breakeven line.
The Aussie (Aud/Usd) saw a 20-pip gap at the Sunday open, but declined another 40 pips to test TheLFB S1 (0.7915). In addition, the support area also represents the low of the last two days of trading, something that makes it an important point for the pair’s behavior. On Tuesday morning, the RBA is expected to maintain the key interest rate at 3.00%
The Cad (Usd/Cad) is trading just above the 1.1600 area, the resistance that held the pair over the last four days of trading. Currently, the cad outlook lies to the upside, as crude oil dropped at a sustainable pace last week. If the pair breaks higher, a test of the 1.1750-1.1800 area may follow very easily.
The Swissy (Usd/Chf) is trading just below the 1.0900 area, a very important price point for this pair. A possible intervention might be very likely around this level, in order to push the pair above the resistance area.
The Yen (Usd/Yen) bounced from the 200-day moving average around the Sunday open, something that caused the yen to decline at a sustainable pace tonight. So far, the pair shed 60 pips, breaking below the low of the previous two days of trading. Moreover, the yen is now preparing to break below the trend-line that connects 06.23 and the 06.26 lows.
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