Dollar Lower In The Asian Session

Daily Forex Fundamentals | Written by TheLFB-Forex.com | Aug 18 08 03:10 GMT |

Overall, the dollar weakened in the overnight session; losing some of the ground it gained in the last 4 weeks. Today's calendar is light, so it is likely the market will slow a little in the European and US session.

The Euro (Eur/Usd) is posting gains for the first time in three days, reflecting a weak dollar in the Asian session. Since the new trading week started, the euro gained 40 pips after it bounced off the previous session low. In the last days, the volume recorded for the euro has been above the average, showing there has been more interest in this pair.

The Pound (Gbp/Usd) is advancing against the dollar and at one point the pair gained 90 pips, very close to TheLFB R1. In the last weeks, the pound has been under an immense selling pressure, because of the problems from the housing market and a slowing economy.

The Aussie (Aud/Usd) is trading near a 7-month low as the pair dropped like a rock in the last 4 weeks. In the Asian session, the pair gained 40 pips, reversing some losses from the last days.

The Cad (Usd/Cad) fell a few pips since the beginning of the new session, but soon reached the low of the previous session that acted as a support area. In the last days, the pair traded just between the TheLFB S1 and R1, reflecting the market's indecision.

The Swissy (Usd/Chf) loss 35 pips in the overnight session but still could not find the strength to break TheLFB S1. Trending lower, the pair reflects the dollar's weakness in the Asian session, since the swissy has a strong correlation with the bond market.

The Yen (Usd/Yen) had lost some ground in the Asian session, dropping 50 pips since the new trading week started. The yen calendar is light today, but tomorrow the markets await the interest rate decision from Bank of Japan, and this will certainly affect the pair's behavior in the following sessions
Asian shares higher

Asian trade: Equity indexes in Asia advanced for the first time in 5 days, as investors found shares cheap. The recent selling had reduced share prices in the MSCI Asia Pacific Index to 13.9 times profit, the cheapest in at least 13 years. The industrial companies were the most hunted by traders as they speculate the economy will avoid the global slowdown and these companies will be able to post profit in line with analyst estimations in the coming quarters.

In Japan, the equity market is trading higher, lead by technology shares. The Nikkei rose 212.13 points (1.63%) to 13,231.54. The Australian S&P/Asx advanced 29.90 points (0.54%) to 5,008.60, despite that Babcock & Brown Power, one of the biggest Australian companies, will post weaker than expected earnings

Gold may fall for a sixth straight week, the longest slide in four years, as a strengthening dollar erodes the precious metal's appeal as an alternative investment. Bullion for immediate delivery rose $9.90 (1.25%) to $802.00.

Crude oil rose for the first time in three days as a storm prompted evacuations from rigs and production platforms in the Gulf of Mexico. Crude oil for September delivery advanced $0.82 (0.72%) to $114.59

Previous Wall Street trade: The major indexes managed to eek out small gains for the week, and the S&P made a weekly close above two significant technical levels which indicate the market may continue to make gains. Using Fibonacci to study the retracement of the May to July sell off, the S&P closed the week above the .382 extension (on 1292.36). This level also served as an area of resistance on June 27 and 30, July 2 and 23 along with August 6 and 13. Last week, it closed above the .236 extension (on 1286.39) of a Fibonacci study measuring the retracement of the sell off from the peak on October 11 2007 to the July 15 low.

Previous European trade: European stocks advanced as the global equity markets see the recent dollar strength as a positive thing. A weaker currency will boost the oversea sales for the European companies, giving a much-needed push to the balance sheet. Another side effect of the dollar's gains is commodity prices are falling. Oil is trading near a 14-week low, reducing the central bank's outlook for inflation, and the need for the ECB to raise rates. Lower rates means easier access to liquidity and credit for companies, something that allows additional investments to be made. The financial shares were also boosted after legislators supported Freddie and Fannie to join the mortgage market.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com

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