NEW YORK ( TheStreet) -- The currency market was flat during the Asian trading hours but the major currencies were again showing a bearish bias at the European open, extending the selling seen throughout a prior few sessions.

The euro/U.S. dollar plunged to new lows overnight, breaking beneath the 1.3300 area. As of December, when the current downtrend started, the euro has lost 1800 pips, or about 14% of its value. Over the same time, the S&P 500 has gained 70 points, or just about 0.6%, even though the two have held a very high correlation over the last 12 months, something that is now getting tested.

Most Recent Quotes from www.kitco.com

This divergence between the S&P and the Eur/Usd was caused by poor data coming out of the eurozone, which puts the euro under huge pressure. In Wednesday trade alone, the euro was the weakest among the most traded currencies in the foreign exchange market.

Despite Wednesday's strong moves, the outlook of the currency market hasn't really changed. The U.S. economy still looks much stronger than the eurozone, U.K. or Japan, assuring that the current episode of dollar strength will continue over the medium term. From these levels, it is very possible that the market will retrace some of the recent gains, but the dollar is expected to resume its uptrend, having as a medium-term target the 85.00 dollar index area.
The London Forex Broadsheet (known as TheLFB) is a is a global forex trader portal based in the U.S. TheLFB's mission is to educate retail and institutional clients on the links that bridge the trader and investor to the free-flowing global market. It serves the needs and develops the skills of forex trading clients with its 30 years of trading and market experience.

TeamLFB maximizes a forex trader's day with support that instills discipline, confidence and structure, enabling the only daily variable to be market-driven. TheLFB service offerings include a mix of complimentary and subscription-based products that cover trade signals, professional grade currency and commodity analysis, comprehensive charting overviews, as well as daily trade desk video reviews. The trader news feed is a proprietary offering that gauges 24-hour market sentiment, guiding all levels of traders on the nuances of each new trading day.

Sign up for free TheLFB Forex Newsletter.