Major Pairs Retrace The Dollar’s Moves During The U.S. Session
Major Pairs Retrace The Dollar’s Moves During The U.S. Session
Overall, the dollar strengthened during the European session, as the S&P futures moved lower, towards the 930.00 support area. While the S&P futures managed to find a bottom somewhere near the U.S. open, the major currencies started to retrace most of the declines seen earlier in the day, and formed a number of pattens on the 4 hour and daily charts, which may suggest that the current downturn has hit its bottom. As a note, every major pair except for the yen tested the 20-day moving average on Monday.
The Euro (Eur/Usd) lost 150 pips during the overnight session, but regained some of the ground loss throughout the U.S. trading hours. In its decline, the euro tested the 20-day moving average and at the same time the 1.3800 support area. The euro-area calendar was clear of any important releases on Monday, and will be over the next few days , which may affect the market due to the lack of momentum.
The Pound (Gbp/Usd) is currently the only pair that managed to advance against the dollar during Monday’s trading session. So far, the pair gained almost 250 pips since the late European session, reversing 150 pips near Sunday open. On the daily chart, the pound appears to be forming a pin-bar formation.
The Aussie (Aud/Usd) fell as much as 150 pips during the overnight session, testing the 20-day moving average. However, the test was rejected , which caused the aussie to trade in a 50-pip range and swing around TheLFB R1 (0.7855) during the U.S. session.
The Cad (Usd/Cad) tested the 20-day moving average and at the same time the 23.6% retracement area from the March downtrend , during the European session. Similar to the other major pairs, the cad retraced the earlier gains during the U.S. session. On the daily chart, the cad appears to be forming a doji-star pattern. In the early U.S. session, a release showed that housing starts reached 128K in May, one of the weakest numbers on record.
The Swissy (Usd/Chf) gained approximately 150 pips during the European session, reaching the highest value over the last two weeks of trading and breaking briefly above the 20-day moving average. However, during the U.S. session, the swissy started to slowly retrace the gains seen previously, inline with the other major pairs.
The Yen (Usd/Yen) was unable to pull any important moves during Monday’s trading session. Throughout the European and the U.S. sessions, the yen traded side-ways, in a 45 pips range. On the daily chart, the yen remains trading slightly below the 99.00 resistance area.
Global Markets Decline On Commodity Stocks
Current Futures: Dow -2.00, S&P -1.00, NASDAQ -6.00
The major indexes from the U.S. markets are trading lower, as the S&P appears reluctant to break above the 945.00 resistance area. European shares closed lower, even though by the end of the session it gave the impression it could recover the declines seen near the opening bell.
The last few trading sessions had been influenced by the declines in the commodity market, mainly oil, which declined 2% in intra-day trading but recovered most of the ground through the U.S. session, and natural gas, which so far lost almost 4%. Even though the U.S. markets fell only a limited amount, the declines were widespread to the majority of stocks, something that also happened during the European session. TheLFB-Forex.com Trade Team noted that this is a rather strange situation since usually when the vast majority of stocks decline (as it was the case today), the major indexes post very strong declines (which did not happened) as well.
In Europe, shares retreated as investors think shares are very expensive related to their earnings perspective. Every market opened for trading in Europe fell on Monday, Iceland being the only exception, as the same commodity stocks led the market lower. Moreover, the financials were among the worst performers of the day in Europe, after Lloyds failed to find enough buyers for its rights issue.
In the Treasury market, investors bought the safety of short-term debt paper, but sold the longer-term ones as most market participants judge inflation will pick up very strongly over the coming months, TheLFB-Forex.com Trade Team said. The spread between the 10-year Treasury notes and the similar maturity TIPS reached almost 2%, the most since September. Over the next three days, the Treasury is expected to sell $65 billion of debt.
Overnight, the Japanese Nikkei added 97.62 points (1.00%) to 9,865.63. The Australian S&P/Asx advanced 36.60 points (0.93%) to 3,971.20. The U.K. Ftse declined 33.34 points (0.75%) to 4,405.22, while the German Dax lost 72.31 points (1.42%) to 5,004.72. The Dow Jones declined 103.54 points (1.18%) to 8,659.59, while the S&P index lost 10.10 points (1.07%) to 929.99.
Crude oil for July delivery was recently trading at $68.10 per barrel, lower by $0.20.
Gold for July delivery was recently trading lower by $10.60 to $952.00.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
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