It truly turned out to be a case of buy the rumour, sell the fact when it came to Nvidia earnings. Tech shares were routed once we got to US trading yesterday and dip buyers were scorched. Nasdaq futures were up over 1% in European morning trade but the index ended the day with nearly 2% losses instead. 💥
Amid the negative risk flows, the dollar has been a beneficiary and we are seeing some key progress being made on the charts as well. EUR/USD in particular has dipped below 1.0800 and is sliding below its 200-day moving average (blue line) at the moment:
EUR/USD daily chart
There is room to run to the downside with the May low only coming in at 1.0635, acting as the next line of support.
USD/JPY is also trading back above the 146.00 mark as buyers aren’t giving up after defending the 145.00 level yesterday. But European currencies are the ones hurt the most, with sterling also marked down by another 0.3% today against the greenback. GBP/USD has taken out its 100-day moving average (red line) yesterday and is now down to the lowest levels in over two months:
GBP/USD daily chart
All in all, the dollar is looking to be in a comfortable spot to extend its upside run again. While US futures are looking calmer so far today, the damage is already done. It won’t take much to hurt sentiment again and if the selling continues, that will continue to underpin the dollar before the weekend comes along.