Currency Pair Overview: New Dollar Index Low In Wall Street Trade

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Currency Pair Overview:

New Dollar Index Low In Wall Street Trade

Overall, the dollar index reach a new low for the current year, as major currencies moved broadly higher in Monday trade. The dollar’s decline comes on positive commodity and equity markets, which denotes the market’s preference for risk. Most of the declines were seen during the second part of the day, after the dollar index actually strengthened during the Asian session. 

Dollar Index Technical View: TheLFB Member Charts.
4 Hour Chart: Short. Main price points: 74.70 - 75.00. Looking for: Wave V)
 
The dollar index is still trading around the yearly lows, with a black wave c in progress, after the market broke through the black wave a low in the past week.
 
The market is trading technically in the final stage of U.S. dollar weakness, with an ending diagonal looking to be completed very soon.
 
An ending diagonal is a pattern that signals a potential turning point, which should happen as soon as prices reach the 74.70-75.00 Fibonacci support region. In this area is the main 76.4% Fibonacci retracement level, (shown on our weekly chart further below).
 
The market is trading in a red wave v) right now, with a corrective sub-wave iv) that looks completed around the 75.90 area.

The euro (EUR/USD 1.4940) had a range a just over 100 pips in Monday trade, within the same high and low as in the prior two days of trading. Still, the euro is now trading a few pips above the break-even line, as the gains seen in the commodity and equity market pulled the single-currency higher. 

Trade Plan of the Day: TheLFB Trade Plan is EUR/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 pound (GBP/USD 1.6360) started the day caught between the 50 and the 100-day moving averages, and used the first part of the day trying to break above the 50-day moving average. Eventually the pound turned into the green helped by the weakness that the dollar posted across the market. Right now, the pound is trading barely above the 100-day moving average, and at three weeks high. 

The aussie (AUD/USD 0.9270) lost about 50 pips during the early hours of the Asian session, but the aussie soon turned around and started heading almost exclusively higher. Right now, the pair is trading at the highest level it has touched since early August 2008, something that denotes the strength of the Australian dollar. In addition, the current uptrend might be extended as the RBA Monetary Policy Meeting Minutes will be published during the upcoming Asian session. 

The cad (USD/CAD 1.0290) managed to break below the 1.0360 area in Monday area, a level that has acted as an important swing point lately. Over the last two weeks of trading, the cad had been trading in a strong downtrend, which is likely to continue as long as investors are looking for alternative investments to the dollar. On Tuesday, investors expect the Bank of Canada to leave the key interest rate at 0.25%. 

The swissy (USD/CHF 1.0130) spent the second part of the day trying to break below the 1.0120 area, but failed to pull the move off. This all happened around the same area that swissy bottomed, over the last four days of trading, which will likely lead to market participants speculating that the Swiss National Bank is closely watching this level. 

The yen (USD/JPY 90.60) developed a range of 60 pips during the Asian and the early European sessions, and since then, the pair has traded within the same 60-pip range. Despite the gains seen in the equity market, the yen had a flat U.S. session, in which it barely moved. This week, Japan’s calendar is clear of any red-flag reports.