There was no arguing that the post-CPI surge higher in bond yields was a significant one. 10-year yields broke out of range between 3.80% and 4.20% but ultimately was capped by the 100-day moving average (purple line), now seen at 4.337%.
US Treasury 10-year yields (%) daily chart
While the break above 4.20% was encouraging, the ceiling at the 100-day moving average also served to cap the dollar’s gains this week.
10-year yields are now at 4.265% on the day but in the bigger picture, it is sort of stuck in between 4.20% and the 100-day moving average now.
As such, that is not really helping the dollar to repeat the Tuesday price action. USD/JPY is off the lows yesterday, moving back above the 150.00 mark today. However, the next leg higher in the pair likely needs help from the bond market to really get going. Otherwise, we might get another languid showing similar to the post-CPI moves this week.
The lack of follow through is more evident elsewhere as the dollar retraces gains from earlier this week. EUR/USD is now back up to 1.0770, invalidating the break of the December low of 1.0723. Meanwhile, gold is also trading back up to $2,005 after a bounce off its own 100-day moving average – now seen at $1,992.24.