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Currency Pair Overview:
Euro Advances On Negative Equity Markets
Overall, the euro, swissy, aussie and the yen advanced against the dollar during the overnight session, but the cad traded side-ways, while the pound tumbled at a very strong pace. It is interesting that the euro headed higher against the dollar overnight, because equity markets stayed in the red zone most of the day. At the same time, the pound was sent lower after Mr. King, the head of the Bank of England said in an interview that two U.K. banks were closed to collapse last year.
The Dollar Index: TheLFB Member Chart Example. This is one of three charts posted daily the Dollar Index, and one of thirty available each day for LFB members that cover global equity, oil, gold, dollar index, plus six major currency pairs.
4 Hour chart trend: Long possibilities. Main price points: 75.83, and 77.10. Looking for: Move higher
Prices on the four hour dollar Index chart have reached new lows over that past few sessions, which means that the bear market may already be completed around the significant Fibonacci support area at the 75.83 low. Currently, we are looking for a move higher, near to 77.10, the wave IV) high where a possible break-out will signal for a move into higher levels over the next few days or even weeks.
If we are on the right track here then the current lows at 75.83 must hold, otherwise we will be looking for a new bottom in the blue wave V).
The euro (EUR/USD 1.4760) is trading very close to the 1.4765 area, which acted as an important support area over the last few trading session. However, the market broke below it during the second part of the U.S. session, in Wednesday trade. It is very interesting that the euro started posting gains as soon as the Thursday session begun, even though the global equity markets stayed in the red.
The pound (GBP/USD 1.6180) was the by far the worst performer of the day, declining against every other major currency, as the news reports coming out of the U.K. are rather poor. During the European session, the pound tumbled some 200 pips, and is now heading with big steps towards TheLFB S3 (1.6130).
The aussie (AUD/USD 0.8735) advanced 90 pips during the Asian and the European sessions, but still it was not able to break above TheLFB R1 (0.8750). A break above this level would allow the pair to test the 0.8790 area, where the high of the current year is.
Trade Plan of the Day: TheLFB Trade Plan is AUD/USD, one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, plus S&P futures, oil, gold, and the dollar index.
The cad (USD/CAD 1.0745) saw a 35-pip range in early Thursday trade, being the pair that moved the least so far. The last few days of trading were dull for the cad, just moving up and down around the 1.0720 area, in a +100 pips range. Until it clears the support or resistance areas of this range, the cad is not going anywhere fast.
The swissy (USD/CHF 1.0235) moved mainly lower during the overnight session, mirroring the euro’s moves. On the daily chart, the swissy is trading just above the 1.0200 area, which acted as an important swing point during the first part of 2008. As such, this area might prove to be a challenge for the market to break.
The yen (USD/JPY 90.50) has posted very strong declines since the Asian session started, falling as much as 110 pips. Moreover, the yen moved almost exclusively lower during the overnight session, without really stopping. In order to continue its downtrend, the yen would have to break below the 90.00 area, where the market had previously bottomed.