Cable Leads, Euro Lags Behind
Euro:
The euro tried again to push below the 1.3600 area overnight, but as happened over the last five days, the move was completely retraced. The pair is trading in the 1.3600 area, again, and just below the 20-day simple moving average. On the 4h charts and even lower, the Eur/Usd appears to be building an early descending triangle pattern that indicates a reversal lower may be on its way.
Eur/Usd neutral price action around 1.3570
Cable:
The market has completely ignored the oversold read on the pound, and forced it to test the 1.4850 area, which is near TheLFB S2 zone, during the European session. The Gbp’s current weakness comes on poor fundamentals, including weak manufacturing and industrial production data released overnight.
Gbp/Usd neutral price action around 1.4950
Dollar Index
The 4 hour trend is Long, into an overbought read (sell resistance) as the Usd strengthened on global risk aversion overnight. The pattern of trading had been very mixed lately, from one session to the other. This might continue for some time, until the global drivers - mainly equities and commodities - find a solid direction to trade in. Momentum is strong. Favor a straddle (Long and Short near term plays).
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