The dollar lost some ground to start the new week as a better risk mood and a fall in USD/JPY overnight did not help with trading sentiment yesterday. The latter owed to growing market expectations of a shift higher in the 10-year JGB yields ceiling by the BOJ. However, as we have seen, that did not materialise and yen bulls were once again left disappointed.
This is helping to see the dollar recapture some of the losses yesterday, as USD/JPY pushes up closer towards the 150.00 mark. Equities are looking sluggish and so that is also one to watch, with S&P 500 futures now down 0.3% after a good start to the week. Put together with steadier bond yields, and the dollar is able to find reasons to put a foot down for now.
Looking at the technicals, EUR/USD is now down 0.2% to just under 1.0600:
EUR/USD daily chart
The pair broke above the 23.6 Fib retracement level at 1.0643 early last week but saw the breakout limited by the 100-week moving average in the pair. The latter now sits at 1.0677 and will continue to be one to watch if buyers are to chase any break higher again for the time being.
But keep below the 1.0643 level and sellers will continue to have some area to lean on in pinning down price action and perhaps look towards retesting the 1.0500 mark again.
Meanwhile, GBP/USD is also down 0.2% to 1.2140 while USD/CAD is up 0.2% to 1.3847 currently on the day.
One of the more interesting pairs continues to be AUD/USD, which is now down 0.5% and erasing a chunk of yesterday’s advance:
AUD/USD daily chart
As much as buyers are still hanging on to some semblance of support around 0.6300, the downside momentum continues to hold rather strongly. Price action continues to be trapped inside a downwards channel and that is keeping sellers favoured since the break below 0.6500 in August.