The dollar recovered positions on the major currencies in the European trading session on Monday, in a move that started strongly on Friday, especially against the euro and the Australian dollar.
The pound, which had maintained a bullish position in that period, also gives strength to the dollar at this time. Paradoxically, stock indices in New York are close to record highs: the Dow Jones closed Friday on the doors of 14,000 points (14,165 is the highest mark, 2007), and the S&P 500 in 1,517 points, compared to 1,565 of the highest value. This diluted, at least for now, the relationship between these indices and the major currency pairs, led by the EUR/USD pair.
The absence of relevant macro data for the next few hours might generate some pause in the currency market, but the dollar is clearly outlined to win the fight against the major currencies.
The euro is approaching the 1.3330 area, which will be a strong short-term support, although its break could generate a quick move to the downside, targeting 1.3160.
As for the British pound, it has broken the 1.57 area, and its minimum target date is at the 1.5590 area. The 4 hour chart shows a downtrend in the dollar crosses.
The yen returned to take downtrend against the dollar in the last few hours, amid a climate of controversy in Japan about the devaluation of the local currency, which some officials consider is too fast. It is located some distance from its low of May 2010, at 94.05, but it can get that area during the Asian session on Tuesday.
The Australian dollar also moves in a substantial decline against the dollar. The Aussie follows a downward path, which has objective for the next few hours under 1.02. The Canadian dollar moves away from parity against the dollar and approaches 1.01. Anyway, its movements are measured in a narrow price range.
