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Overall, dollar strength was the name of the game in the early U.S. session but that came to an abrupt end as the European traders went offline, cementing the new swing points in for the week. The United States had a few medium and high level releases today starting with the Empire State manufacturing index. This report showed that business improved for manufacturers in New York during the month of August. Also, TIC data from the Treasury Department showed an increased demand for long term U.S. assets.
The euro (EUR/USD) has weakened by 90 pips or 0.63 percent since the open. The pair fell over 35 pips below the 50 day moving average before a slight retrace where it looks as though the pair will close just above the 1.4090 area. This was an area of support for the pair last week.
The pound (GBP/USD) broke below the 50 day moving average with relative ease after fighting so hard with it last week. The pound also drove right on through the 1.6390 swing area before retracing from the low of the day at 1.6275. The pair is finding resistance in the area around the S3 pivot level at 1.6358.
The aussie (AUD/USD) is looking to close the day out by declining 65 pips or 0.82 percent. The pair flirted with its 20 day moving average located at 0.8295 and had no trouble breaking below the low of the previous week before finding support at the S2 pivot level, creating a new swing point at 0.8153 which is roughly 50 pips above the pairs 50 day moving average. This evening the Reserve Bank of Australia will be releasing the monetary policy meeting minutes. This is a top tier release and could provide a lot of volatility.
The cad (USD/CAD) managed to break above the high of the previously established trend at 1.1075 and ran for another 50 pips before momentum ceased and the pair fell back below that area easily. The loonie found slight support earlier in the U.S. session at the R1 resistance level but that area could not hold late in the session.
The swissy (USD/CHF) after bouncing off the 20 day moving average at the start of trading this week the swissy breezed right through the 50 day moving average at 1.0785 without a care. The pair found heavy selling in the area of the S3 pivot level at 1.0836 before retracing exactly to the 61.8 percent Fibonacci retracement located at 1.0769. The swissy is currently finding resistance at the 50 day moving average.
The yen (USD/JPY) produced no spectacular moves during the U.S. session today. The pair has found slight support in and around the 94.50 area once again late in the session. This area also corresponds to the low of last week which the pair is testing as support with a few minor breaks but no major movement.
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