Currencies Hit by Risk Aversion

The pound (Gbp/Usd 1.6675) fell to TheLFB Support 1 area (1.6685) during the Asian session, but was unable to push any lower until the London open provided the necessary momentum to move the price action lower. Around this same area, 1.6685, the market formed a swing point low on Oct. 23.

The aussie (Aud/Usd 0.9190) headed almost exclusively lower during the overnight session, shedding about 100 pips. Right now, the aussie is trading near the 20-day moving average, a support area that has been holding the market over the last week of trading. If the selloff in the commodity market continues during the upcoming sessions, the aussie could easily break beneath this support area.

The cad (Usd/Cad 1.0615) rose 80 pips since the day started, and right now the pair is trading near the resistance area formed by the 20- and the 50-day moving averages.

The swissy (Usd/Chf 1.0180) held a range of 150 pips over the last few days, moving up and down around the 20-day moving average. This comes as the market has problems finding an appropriate value for the Swiss franc, the currency with the smallest amount of red-flag reports on its economic calendar this month.

The yen (Usd/Jpy 89.05) was driven lower by risk aversion throughout the first part of the day. However, as soon as it approached the 88.70 area, the pair started reversing. The 88.70 area has represented an important intraday swing point lately, apparently being protected by very large orders.

Forex Tools

Trade Plan of the Day. Currency Glossary.

>To order reprints of this article, click here: Reprints