Currency Pair Overview: Dollar Holds Gains In Mixed Overnight Trade

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Currency Pair Overview:

Dollar Holds Gains In Mixed Overnight Trade

Overall, the overnight session was rather undecided, with the major pairs moving in opposite direction. This might have been caused by the S&P futures, which moved up and down without a clear direction or trend during the overnight session, and by the light momentum observed in the market. The euro, the aussie and the swissy managed to post some gains earlier in the day, but now are trading near the break-even line. At the same time, the Gbp advanced against the dollar, while the Canadian dollar declined. 

Dollar Index Technical View: TheLFB Member Charts
4 Hour Chart: Short. Main price points: 74.95, 75.90, and 76.66. Looking for: Wave i

Prices on the dollar index have finally moved higher, after the market broke through the 75.90 area, as discussed here during last week. This looks to be a confirmation that the bottom is in; long positions should be an advantage now if S&P futures hold lower, and especially if the market can start to make five waves up in the current black wave i. This will suggest that a new trend has been formed in the near-term.
 
The next target in the current market conditions is around the upper black resistance line of an ending diagonal (daily chart), where traders may look for a small pull-back in wave ii.

The euro (EUR/USD 1.4875) advanced 60 pips during the overnight session, up to the neutral pivot point (1.4925), and is trading once again near Tuesday’s opening price. This happened as the market turned around, to re-test the lows set around the opening bell. 

The pound (GBP/USD 1.6375) and the Japanese yen are the only two currencies that managed to consistently post gains against the dollar during the overnight session. Since the session started, the pound advanced 100 pips and is currently trading close the 1.6400 area, the same place where the pair topped in Monday trade. 

Trade Plan of the Day: TheLFB Trade Plan is GBP/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 aussie (AUD/USD 0.9170) is currently struggling to break above the 0.9180 area, which has acted as a strong support level over the last week of trading. A break above this level might allow the pair to test the 0.9300, near the current high of the year, but this can only happen on positive equity and commodity markets.  

The cad (USD/CAD 1.0685) saw light momentum during the Asian session, and for a few moments, it came to a virtual standstill. Through the European session the cad gained momentum, but still far below the average of the prior periods. Lately, the Canadian dollar had been surrounded by a negative sentiment, which may not allow the USD/CAD pair to move lower very easily. 

The swissy (USD/CHF 1.0180) has followed the euro over the last few trading sessions, without hesitation. The overnight session was no exception, with the swissy mirroring every pip moved by the single currency. The USD/CHF is expected to continue its downtrend as the markets move towards year-end. 

The yen (USD/JPY 91.90) moved lower in stair-steps, something that helped the pair decline 50 pips and break below a support trend-line that has been holding things up for one week now. The Japanese economy has a clear calendar until Friday, when an important number of Japanese news reports will hit the wires, including the BoJ interest rate announcement.