Currency Pairs Gain in Fragile Trade

NEW YORK (TheStreet) -- The major currency pairs gained some pips in Friday morning trade, but the moves seen until now are rather fragile.

The only exceptions were the pound and the yen, which experienced an active first part of the day. During the European session, the European gross domestic product numbers disappointed most investors, but until now this hasn't been reflected in currency valuations. Ahead, investors prepare for the Canadian and U.S. trade balances and for the U.S. consumer sentiment report.

Dollar Index Technical View: TheLFB Member Charts

Four-hour Chart: Short. Main price points: 74.95 and 76.82. Looking for: Wave V)

The dollar index found support over the past sessions and revealed a possible structure of a completed five wave down move from the 76.82 area to current lows (see the chart). The blue wave V) may already be complete, which means that the dollar bottom may be in place just under the 74.50 area in the near-term. The overall global market view (equity and commodity futures) signals for at least another push higher and as such the dollar may fall through the 74.95 area once again. If this is the case then we will be looking for a more complex blue wave V) than initially thought.

The euro (Eur/Usd 1.4875) moved higher at a very slow pace throughout the overnight session until it touched the 1.4890 area, where the neutral pivot point and the 20-day moving averages can be found. In order to break higher, the market will need much stronger overall momentum, one that might come if equity markets move deeply into the green.