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Overall, the major currencies traded in split fashion against the dollar on Thursday, as investors turned to a regional story for valuations. The major pairs (except for the pound) moved side-ways during the first part of the day, but experienced a very volatile U.S. session. On Thursday, the euro and the swissy posted declines compared to the greenback, the cad and the pound appear to be forming doji-stars on the daily chart, whereas the aussie was the only major pair that advanced against the dollar.
The Euro (Eur/Usd) spent most of the Thursday session trading in a wide range. Despite this, the pair finally managed to break to the downside during the late U.S. session, moving in-line with the other major pairs. For now, the euro continues to trade below the 20-day moving average.
The Pound (Gbp/Usd) had a very volatile Thursday session, but still the pair was unable to break from the range of the prior day. During the 4:30am EST releases, the pound plunged 280 pips, from which the vast majority came within a very short time frame. However, the U.S. trading hours send the pair higher again, something that helped the pair retrace half of the declines seen earlier.
During the European session, the pound had a very busy release calendar. A report showed that retail sales fell 0.6% in the U.K between April and May. Both food and non-food stores recorded strong decreases in sales in the month of May from April. A different report showed that public sector borrowing rose in the U.K. to £19.9B in May.
The Aussie (Aud/Usd) had a very weak overnight session. The pair tried to break TheLFB R1 (0.8000) during the London open, but except for this the pair had an effective range of roughly 40 pips. The aussie started to advance during the U.S. open, but shed most of those gains in the second part of the U.S. session as the S&P bounced off from the 915.00 area.
The Cad (Usd/Cad) wasted most of the overnight session trying to break below the 1.1300 level. The break-out finally came during the U.S. open, but even so, the cad retraced the move completely during the late U.S. session. Over the last three days of trading, the cad appeared unable to trade decisively in any one direction.
The Swissy (Usd/Chf) had a very volatile overnight session, as the Swiss National Bank held its interest rate meeting. Even if the pair traded in volatile fashion in the first part of the day, it did not manage to break any import price points. Shortly after the U.S. open, the swissy surged 130 pips and tested TheLFB R1 (1.0890).
During the European session the SNB decided to maintain the Libor rate at 0.25%, while it issued a statement in which it said, “the global economic situation remains unfavorable and further economic deterioration cannot be ruled out […] The SNB will take firm action to prevent an appreciation of the Swiss franc against the euro.”
The Yen (Usd/Yen) had a range of approximately 30 pips throughout the overnight session, but the pair managed to break free from it during the U.S. open. The yen surged 100 pips during the U.S. trading hours, which made the pair re-test the resistance area formed by the 20,100 and by the 200-day moving averages.
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