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Firmer Risk Sentiment Weighs Further On Greenback, AUD & NZD Rise Over 1.5%

FOREX
  • Below-expectation US data and a strong recovery for major equity indices on Thursday further weighed on the US dollar, prompting the DXY (-0.52%) to narrow the gap significantly with the year’s lows at 100.82. The firmer risk backdrop underpinned an impressive rally for the likes of AUD & NZD, while the Swiss Franc extended its most recent upward trend.
  • For AUDUSD, an additional tailwind was firmer jobs data overnight, with both the employment change and the unemployment rate coming in better than expectations. The continued strength has seen the pair rise to a new seven-week high of 0.6797.
  • On the tech side, AUDUSD has topped the 50-day EMA convincingly on Thursday amid the widespread greenback weakness. This works against the broader downtrend and key short-term resistance at the April 04 high has been pierced. Attention now turns to 0.6824, the Feb 24 high.
  • CHF again trades well, with USD/CHF through to new YTD lows as well as breaching the February 2021 low at 0.8871. The pair was yet to hit technically oversold levels, however, today’s price action could tip the 30-day RSI below 30 for the first time since November.
  • Elsewhere in G10, EUR/USD now sits north of the noted 1.1033 resistance, while GBP/USD has made a new trend high above the bull trigger at 1.2525.
  • USDJPY traded poorly following the US data, falling over a big figure from 133.17 to 132.02 lows. Despite the renewed weakness, the slightly higher US yields and the grind higher for stocks has seen the pair recover around 70 pips of the moves as we approach the APAC crossover.
  • US retail sales and UMich sentiment and inflation expectations data headline Friday’s docket to finish the week.
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