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DXY Decline Hits Reverse, Steers Clear of 100-DMA Support

FOREX
  • Following several sessions of weakness, the USD Index reversed course of Friday, recovering after a major test of the 100-dma support. The greenback was among the best performers Friday, second only to the JPY, that benefited from a second session of declines for Wall Street equity markets.
  • The greenback recovery was most prominent against some of the week's best performers, including the AUD, which retraced back to $0.72 just after the London close. This raises attention on the false break higher earlier in the week that saw prices climb north - but not close above - the 100-dma of 0.7286. Further weakness could see the pair retest the 2022 lows of 0.7130.
  • Similarly EUR/JPY posted the largest range of the year so far - putting EUR/JPY through the 100-dma support of 130.02, opening further losses toward the 50-dma at 129.49 - which coincides with the 50% retracement for the Dec-Jan upleg.
  • A US holiday on Monday should keep price action muted at the beginning of the week, with focus turning to Chinese GDP data, the BoJ rate decision, UK inflation and the continuation of Q1 earnings season for US corporates.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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