And that’s fairly contradictory to the happenings in broader markets I would say. The S&P 500 and Nasdaq soared to close at fresh record highs yesterday. Meanwhile, 10-year Treasury yields fell to 4.29% and taking a look below the key technical juncture here.
Despite that, the moves in FX have been less than straightforward. EUR/USD started the week above 1.0900 before falling to 1.0855 and is now back up to 1.0890. Then, USD/JPY took a dive from above 157.00 to 154.60 before recovering back to 156.40 yesterday. The advance was arrested by its 100-hour moving average before a retreat today to 155.80 now.
Perhaps USD/CHF is the only standout but the pair is also facing a key technical standoff as highlighted here.
It’s a tough one to square up for now. However, do always be mindful of the old adage that the bond market is always right.
If yields are setting up for a stronger breakdown this week, that should eventually spill over to FX as well. And that would not bode well for the dollar. So, keep an eye out for that as we continue the countdown to the US jobs report tomorrow.
This article was written by Justin Low at www.forexlive.com.
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