Technical Analysis

Dollar holds lower so far in European trading

Equities are barely holding on to the optimism from earlier, owing to Chinese markets bouncing back on re-opening hopes today. European indices are a bit more mixed now with US futures seen trimming gains, now only up 9 points, or 0.23%, on the day.

Bonds are bid though, benefiting from softer Spanish and German inflation readings so far on the session. 10-year German bund yields are down 9.4 bps to 1.898% while 10-year Treasury yields are down 3.6 bps to 3.666% currently.

All of this is translating to a softer dollar on the balance of things, with the greenback losing ground after an impressive showing in US trading yesterday. Month-end talk seems to be suggesting that dollar selling is the play, and that is also a factor for consideration before we move over to December on Thursday.

EUR/USD is up 0.3% to 1.0368 but perhaps more crucially, the pair is now trading back under its 200-day moving average (blue line) at 1.0377 after yesterday’s fall upon nearing 1.0500:

USD/JPY is down by 0.6% to near 138.00 as yields look heavier so far today. However, sellers will need to do more work in order to crack below daily support at around 138.45 as well as 137.65 currently:

Meanwhile, GBP/USD continues to hold in between its key daily moving averages but is now also finding itself caught in between its 100 and 200-hour moving averages in a state of flux so far this week:

Elsewhere, AUD/USD is keeping higher by 1.1% today to 0.6725 and holding back above its 100-day moving average (red line) at 0.6685. That is a positive development but buyers are still largely struggling to break through resistance from the 61.8 Fib retracement level at 0.6767 in the bigger picture.

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