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Overall, the market lacked a direction during the Asian session, as happens most of the time in the current trading environment. Usually, after the London open, all this changes as the major currencies start working on the trend of the day, and get backing from the European commercial markets. The last few weeks have shown a mixed direction of trade, so the best take would be to straddle the dollar, looking for the strongest and the weakest currencies to trade against the greenback.
The Euro (EUR/USD) is trading near the 20-day moving average, after the NFP report sent the pair 170-pips lower on Friday. Following these declines, the euro is once again trading within the 1.4150-1.4225 channel, which may be too weak to hold over the upcoming trading sessions if equity markets drop lower. A bullish move from global stocks may allow a test of 1.4250.
The Pound (GBP/USD) tested the low touched on Friday, but the due to the market’s light momentum bounced from the support area at 1.6670. For now, the pair is trading just above the 1.6700 price point, which held it back for two months in June and July.
The Aussie (AUD/USD) is currently trapped within a 100-pip channel on the 4-hour chart, very close to the current high of the year at 0.8450. If this channel will fail to hold the pair, the aussie will probably test the 0.8255 area, which in the past acted as an important swing point.
The Cad (USD/CAD) opened the Asian session mixed, lacking a clear direction, something cad traders are used to throughout the overnight session, as the pair fails to attract institutional volumes. During the upcoming trading sessions, the cad has a light economic calendar, something that might be reflected in the pair’s valuation and an inability to easily break new ground.
The Swissy (USD/CHF) spent most of the last few sessions moving side-ways, in a tight channel, but on Friday around the U.S. open, the swissy advanced 200 pips breaking above the 1.0650 level. During tonight’s Asian session, the pair saw a 20-pip range.
The Yen (Usd/Yen) bounced lower from the high reached on Friday, around the 97.70 area, and has retraced 50 pips since then. During the prior U.S. trading session, the yen saw very strong momentum, especially after the NFP report came in better than expected, which pushed it higher by some 250 pips higher.
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