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Overall, there was a surprising amount of movement yet again during the Asian session. It has been several weeks since the last time this type of volatility was seen, but is a welcome change. During the European session the German producer price index will be release with economists expecting a flat read of -0.1 percent and the monetary policy meeting minutes from the U.K. will also be released.
The euro (EUR/USD) has surpassed the high achieved during the previous session with relative ease. The pair was recently rejected from the R1 resistance pivot at 1.4171 after a 30 pip run at the start of the Asian session. If this level were to be breached the pair will come to its other arch nemesis, the 20 day moving average at the 1.4210 level.
The pound (GBP/USD) is finding resistance once again at the 20 day moving average which is at 1.6585. This is the same area that the pound struggled with in the previous session after rising 225 pips. If the 20 day moving average were to break down, the next level of resistance is seen in the 1.6670 area. The European session will see the release of the monetary policy meeting minutes which could provide volatility.
The aussie (AUD/USD) is taking notes from the euro as it has also surpassed the high of the previous day to find resistance at the R1 pivot level. This level is also near the 20 day moving average which was briefly touched before being rejected. A Melbourne Institute report has shown that the leading index has increased from last month’s -0.4 percent to 0.7 percent.
The cad (USD/CAD) is finding mild support at the critical 1.1000 level which is just below the 38.2 percent Fibonacci retracement area. The next major level of support on the 4 hour chart is seen at 1.0940. Whereas the 1.1120 area will provide resistance and then just above that is the 50 percent retracement (1.1172) and the 50 day moving average (1.1185).
The swissy (USD/CHF) still has a heartbeat after the previous session’s dismal moves. The swissy broke the low of the day to test the 20 day moving average at 1.0738 and found support at the S1 pivot level. This is a pair to tread lightly with until it finds a solid trend.
The yen (USD/JPY) took another run at the 200 day moving average. However, the pair could not find the momentum to break it and has instead returned to the 94.50 area which has provided support in the past.
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