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Overall, the currency market is showing us a hint of further dollar strength as Asia is stricken with earthquakes and typhoon warnings. The euro, pound, and aussie saw brief strength before weakening to the lows of the sessions. While the loonie and swissy were slightly lower and the Japanese yen trended lower.
The Euro (EUR/USD) has become firmly entrenched in between the 20 and 50 day moving averages after struggling to break free of the 20 during the early US session. The pair has recently been rejected from the neutral pivot point in the area of 1.4154. The morning hours will see no significant news announcements.
The Pound (GBP/USD) bounced off the 50 day moving average in late US trade, gaining 80 pips before losing steam and heading for a retest of the same area, near the 50 day average.
The Aussie (AUD/USD) saw strength coming into the Asian session but that quickly dissipated as the other majors started to show that the dollar still had some fight left. After a four week run that has put the aussie a highs not see all summer long the pair has retreated to test the .8330 level as support.
The Cad (USD/CAD) briefly broke above its 20 day moving average in late trade, the pair reversed and found support at its neutral pivot point at 1.0868 before testing the 20 day average again. The pair saw these levels last week as it tried to halt the 900 pip slide against it only to find resistance in the 1.0930 area. The Cad is the only pair to have a major news announcement, housing starts, in the morning.
The Swissy (USD/CHF) has also found support in the area of its neutral pivot point at 1.0844 after managing to stay above the 50 day moving average during trade today. This pair has been range bound for most of the summer, trapped between the 1.1000 and 1.0600 levels, sometimes covering that distance in less than a day.
The Yen (Usd/Yen) has fallen 60 pips to the 100 day simple moving average after a magnitude 6.5 earthquake hit near Tokyo and a Tropical Storm is due in the area later today. The pairs major moving averages are all starting to converge which will give immense amounts of support to the yen.
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