The U.S. trading session on Monday saw equity markets trading deep in the red, something that allowed the dollar to gain in value. Market volume was initially strong enough to move things through support on the S&P, but oil and gold held onto near-term price points, and there was just not enough momentum to break through resistance on the dollar index.
The major pairs have stalled at the 4 hour chart swing points that they exploded higher from, after the recent FOMC rate meeting statement. As was noted at the time, the markets have once again proven that they will find a natural base that really is very hard to push away from without quickly revisiting the extreme break-out areas. The signal here is that the major economic regions are not going to let the Usd devalue as easily as may have been thought, and that any moves lower on the dollar index will be hard fought.
This week is full of economic releases that may very well set the tone for currency valuations going forward, and may also instigate a more natural looking move on the Usd rather than the parabolic moves that seem certain to be reversed. The ECB rate decision is released on Thursday, with a cut of 50 basis points built into valuations, the U.S. offers economic releases all week, and most regional currencies have at least one major release that could easily move prices.
It all leads to periods of trade this week that may be able to hold valuations, and may be a week that once again tests Usd buyer resolve as each session gets underway with good volume at 23:00 EDT, 02:00 EDT, and 07:00 EDT.