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Price action on S&P futures indicates that the equity market may be looking for further loses, after the failed long break of 923 that has reversed back critical support levels. If equity weakness continues we will be expecting Usd strength in the near-term, but as we have witnessed in June, Usd strength comes with increased volatility on a daily basis, as the market struggles to hold dollars from one regional session to another.

The overnight trading session has pushed prices on the majors back to Friday highs/lows, and from here we can get a good read on market momentum, and the potential to hold. The commodity pairs, aussie and cad, are being sold in-line with oil and gold looking weak, while euro has gone from looking bullish at the long test of 1.4000 last week, to bearish at the test of 1.3850 overnight; that may lead to a move to sound out bids at the 1.3780 area.

The European markets are trading at support, and at the lows of last week; the U.S. markets however have room to drop before testing last week's lows. Volume is very light, and as such this could all spin on a dime, and respecting the fact that last week's pip count was tiny on the majors, (outside of Usd/Jpy the majors moved a combined net 40 pips against the dollar all week), and most market participants will be in in no rush to get involved in anything that is not backed with some momentum.