European traders will be greeted with an air of dollar strength upon their return from the Easter holiday. That comes as the greenback caught a bid yesterday, helped out by stronger ISM manufacturing data here. But I would argue that it was more so a surge higher in Treasury yields that led to the dollar jump. It’s hard to attribute all of that to just the data alone, as the turn of the month/quarter might also have been a factor. Either way, the dollar is in the driver’s seat now.
USD/JPY weekly chart
USD/JPY in particular is still looking poised close to the 2022 and 2023 highs of 151.90-94. That will remain a key chart to watch in the sessions ahead. Tokyo is also closely watching things, so it remains to be seen at which point that they might actually intervene for real.
Besides that, EUR/USD is also down to its lowest in nearly seven weeks at 1.0730. The pair broke the trendline support here and sets up a potential test of the February low of 1.0695 next.
Then, GBP/USD broke out of its recent ping pong range here as price fell below the 200-day moving average of 1.2586. Sellers are in control and looking to contest the February lows around 1.2518-35 next.
Elsewhere, USD/CAD is inching back closer towards another test of the 1.3600 mark while AUD/USD is testing waters below 0.6500. The latter still hasn’t had a clear break lower yet, with support around 0.6485-88 still somewhat in play.
In short, the dollar is holding firmer and making a couple of key technical plays. That said, there are added layers to get past in order to solidify any larger trend. That will depend on the bond market as well as the US jobs report later this Friday.