Currency Pair Overview: Dollar Crushed By U.S. Positives

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Currency Pair Overview:

Dollar Crushed By U.S. Positives

Overall, the major pairs found the strength to advance in Thursday trade, after the market’s optimism received a strong boost from positive U.S. GDP data. With today’s gains, the major pair reversed a considerable amount of the declines seen during the prior three days of trading. Ahead, investors will prepare for the BoJ interest rate decision, which might show that the BoJ is preparing to stop some of its quantitative easing methods.

Long equities are instigated by positive economic data. Long equities create a short Treasury/Bond market. A short Bond market creates a weaker Usd when the global economy is in a contraction-to-growth phase

Dollar Index Technical View: TheLFB Member Charts
Daily chart trend: Short. Main price points: 75.00. Looking for: Ending diagonal

Prices on the dollar index have reached a new low recently, which means that the final push of an ending diagonal may be complete. The market has touched the 75.00 support region where an ending diagonal of a red wave V may be completed. If this is the case then traders should be looking for a long turning point, especially once the upper line of diagonal is taken out.

The euro (EUR/USD 1.4830) surged nearly 150 pips during the day, to recover every pip lost in Wednesday trade. On the daily chart, the euro is trading just below the 20-day moving average, which might act as an important swing point area over the upcoming sessions. Following the positive GDP read, the euro’s outlook had switched to long once again.

The pound (GBP/USD 1.6535) is trading once again above all the important moving averages, after it managed to advance as much as 250 pips in Thursday trade. Right now, the pound appears to be consolidating just below the 1.6600 area, the main swing point of the last five months of trading.

The aussie (AUD/USD 0.9150) was the star of the day, advancing as much as 200 pips in intra-day trading. These gains came as the interest rate differential came into play on risk-tolerance, and as the commodity markets posted gains for the fist time over the last three days.

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 1.0670) lost 140 pips during the day, being driven lower by the gains seen in the commodity market, especially in gold and crude oil. Over the last seven days, cad had been trading in a rather steep upward channel. Following the better than expected GDP read and coupled with a bullish commodity market, the cad might break free from this channel and resume its downtrend once again.

The swissy (USD/CHF 1.0185) managed to decline a few pips on the weakness that the dollar posted across the board. In addition, the swissy managed to break below the 1.0240 area, which has been a crucial price point over the last months of trading.

The yen (USD/JPY 91.50) advance more than 100 pips in Thursday trade, to recover a large part of the declines seen during the last two days of trading. The yen had been driven up during the day by investors who bought risk, and therefore use the yen as a funding currency. The Bank of Japan interest rate decision and statement will be delivered overnight.