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(H2) Recovery From The 50-Day EMA Extends


Heavy Midweek Issuance Over $31B


Bonds and tech gains




Price Signal Summary: USDBRL Bear Cycle Extends

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  • The initial reaction to the November NFP report in currency markets was general dollar weakness. - Reacting to the below consensus headline figure, the dollar index retreated around 0.3%. EURUSD spiked to an intra-day high of 1.1333 and USDJPY tagged 113.
  • As markets digested the numbers, breakdowns suggested a much healthier report and the dollar pared losses and extended to session highs as the Fed’s taper timeline would appear unaffected in the short-term. USDJPY staged a solid recovery and rose to 113.61 with renewed optimism for the greenback.
  • With a potential acceleration of the taper in place and lingering Omicron-related pessimism, equities began to feel the pressure prompting a broad based sell-off in risk.
  • Risk-tied currencies suffered significantly, with AUD and NZD both retreating 1% off their highs and extending their recent downtrends. AUDUSD trades within a few pips of the 0.70 mark, narrowing the gap with the November 2020 lows at 0.6991, where support appears scant below this point.
  • In tandem the Japanese Yen came roaring back as markets sought the historical safe havens. As such, AUDJPY fell close to 2%, briefly breaching the September lows below 78.85. NZDJPY also declined close to 1.5%.
  • Despite the volatile session the dollar index is just 0.15% in the red, ending the week broadly in line with last week’s close.
  • Monetary policy decisions in Australia and Canada on Tuesday and Wednesday respectively. Friday’s US CPI is the headline piece of data next week.