NEW YORK (TheLFB-Forex.com) -- The Monday trading session held support well and offered the chance for a foundation to be placed on the major currency pairs that may be tough to now break -- unless global equity markets drop lower overnight.A steady equity drop, which took off the excess froth that had built up in Asia and Europe, allowed traders to square positions and prepare for a big week of U.S. based economics. Across the market, volume is light with sentiment and order flows showing low momentum as well. The divergence between price action and trader sentiment has made for a lot of wheel spinning in the forex market place, and there is a distinct lack of block orders at the break-out points right now. Without institutional yard orders, the previous session highs and lows will remain the intraday trader's target to get banked and finished. The four-hour momentum chart reads are mainly showing a neutral midday stance, and most four-hour trends are short-dollar outlooks. The overnight Asian session may allow one more drop in equity, and/or commodity trades, and that may be the time that short-dollar orders will hit hard enough to draw in volume and create momentum to then break the tight ranges that have been set in July. Equity and commodity reads have come off overbought in the near-term, and they will now signal whether the next round of U.S. dollar selling can be achieved. Commodity markets are still mixed and showing a divergence between futures price valuations (higher), and fundamental supply/demand forecasts (lower).
-- Written by TheLFB Trade Team in Scottsdale, AZ.