Technical Analysis

Dollar holds more mixed so far on the day

Equities are lower and bond yields have come off earlier highs, making it fairly tough to get a grasp on any real drivers in European trading today. European indices are more mixed but slightly lower on the balance of things, with S&P 500 futures down 15 points, or 0.4%, currently. Meanwhile, 10-year Treasury yields are up 2.9 bps to 3.517% but off the high earlier of 3.544%.

The state of flux is not giving much for currency traders to work with, as the dollar holds more mixed so far on the day. USD/JPY is still up by 0.8% to 135.30 levels currently though, keeping near the highs in advancing past its 200-day moving average from earlier today:

That remains the key technical level to watch, alongside this one in the bond market, in determining one part of the dollar sentiment in trading this week.

Meanwhile, EUR/USD is up 0.2% to 1.0560 and looking to keep a push above the 1.0500 mark after the late recovery at the end of last week. Buyers are still well in control but there are some large expiries at 1.0570-75 today that could limit price action before rolling off later.

The key trendline resistance (white line) just above 1.0600 (a better look here) remains the next big resistance level to watch currently.

GBP/USD also posted a strong recovery late last week after the initial shot lower after the US non-farm payrolls, as buyers leaned on the 200-day moving average (blue line) to keep the momentum going. The pair is down 0.2% to 1.2265 today though, still getting caught in and around the August highs at 1.2276-93 for the time being.

Hold above the 200-day moving average and buyers will still retain a more favourable bias in search of a potential push towards 1.2500 next, all else being equal that is. But break below and sellers will find themselves in a decent spot to try and wrestle back some momentum ahead of the Fed next week.

Elsewhere, AUD/USD is up 0.2% to 0.6800 as buyers continue to hold a push just above the 61.8 Fib retracement level at 0.6767. Price action is now largely caught in between its 100 (red line) and 200-day (blue line) moving averages, with a more bullish near-term bias keeping buyers interested in search of the latter – now seen at 0.6919.

That said, with there being little else to work with to start the new week, there might not be much appetite for a strong push unless we see firmer risk tones take over.

For now, it looks like we are settling into a more pensive mood to start the new week with it being the Fed blackout period and not much on the economic calendar to really impact broader market sentiment until the US PPI data on Friday perhaps.

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