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Overall, the major pairs moved higher against the dollar in trade on Thursday. The strongest gains were seen in the pound and in the aussie, both of which had a fundamental driver behind them. However, the euro and the swissy barely moved during the overnight session, both failing to follow the overall strength of the market. Ahead, the currency market will probably retain a strong momentum during the U.S. trading hours, as was the case in U.S. trade this week.
The euro (Eur/Usd) spent almost the entire overnight session trading in a 30-pip range, limited by the 20 and by the 50-day simple moving averages at 1.4080 and 1.4050. In order to move anywhere from here, the euro will need to build a strong momentum, one which it apparently lacked during the overnight session. The pair’s next attempt to break the range seen during the European session may come during the U.S. open.
The pound (Gbp/Usd) rose strongly throughout the European session, after a report showed that U.K. house prices surged for a third month in a row in July, recording a 1.3% appreciation, the biggest monthly gain since 2006. Ahead, the next major resistance is in the 1.6550 area, where the pound topped out, over the last few weeks.
The aussie (Aud/Usd) gained approximately 80 pips during the European session and recently broke above the 0.8215 area; a place where the pair spent half of the prior session of trade. For now, Australia is the only major economy that has managed to avoid a recessionary period, something that has empowered the Australian dollar.
The cad (Usd/Cad) fell nearly 60 pips during the London open, but soon retraced a portion of these declines. Over the last few weeks of trading, the pair was the only major that managed to develop and sustain a trend, something that helped the valuations decline near to the lowest value this year. At 8:30am EDT, the Raw Materials Price Index will be released; its effect in the forex market is historically minimal but any pair this oversold may react to almost any driver.
The swissy (Usd/Chf) saw very light momentum during the European session, similar to the euro. The pair lost 20 pips during the first part of overnight trade, but started generating price action around the 1.0860 area, but all the time it was lacking a direction.
The yen (Usd/Jpy) traded most of the time in a 30-pip range during the overnight session, slightly below the 200-day moving average at 95.15. The yen has struggled to break above this price point for approximately six days, and with such a strong linear trend line locking in the long moves, it is unlikely to break unless huge volume reads start to hit.
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