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USD continues to weaken helping majors higher

The bullish sentiment for the euro continued once again in today’s forex trading session, with the euro gaining strongly against the dollar, which continued in bearish tone on the usd index daily chart, falling below the key potential support level at 78.75, and now starting to look increasingly weak. Indeed with the recent double top at the 81.37 level, the longer term outlook for the US dollar is looking heavily bearish, and with the price action now well below all four moving averages this is adding additional pressure to the down side. The 9 day moving average has now crossed below the 40 day moving average giving a further bearish signal, and with the deep shadow to the upper body in today’s trading, the index looks set to re-test the next level of support in the 78.03 region and a breach here, could open the way to a deeper move towards the 77.00 region and below.

Elsewhere in the forex markets today, Cable appears to be running out of steam as it struggles to hold above the psychological 1.600o region, to currently trade at 1.5994. Yesterday’s price action ended with a narrow spread up candle, but with a deep wick to the upper body, and this is being repeated in today’s forex trading session once again, as the pair attempt to breach this level, which is also capped with some deep resistance immediately ahead. Having had 9 straight days of gains, a technical pullback is almost certain, with further bullish momentum likely, should the US dollar continue it’s downward decline as expected.

Finally the euro pound gained strongly today, breaking above the 0.8400 price level to currently trade at 0.8411, as the pair attempt to break through the bunched longer term moving averages in this area. A break and hold above the 40 and 200 day averages will then open the way for a further advance later in the week, with a move towards the 0.8500 once again where further deep resistance now awaits on the daily chart.