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FOREX: Greenback Loses Ground as US Yields Slip Off Recent Highs         

FOREX
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  • US yields have reversed a small portion of this week’s march higher and accordingly, the USD index is roughly 0.3% lower on the session. Given the ongoing sensitivity of the Japanese Yen to movements in core yields, USDJPY has also sold off on Thursday, dipping 0.7% to trade back below 152.00 as we approach the APAC crossover.
  • The pair remains roughly 1.5% higher on the week and given the strong rally across October, initial support is not found until 150.50, Tuesday’s low and firm support remains much further down at 147.77, the 50-day EMA.
  • Yen volatility is likely to remain the clear focus for currency markets as the primary driver for sentiment remains core yields and next week’s busy calendar includes snap legislative elections in Japan, the BOJ decision and key growth & employment data prints in the US.
  • Broad dollar weakness was a consistent theme across the rest of G10, with the likes of EURUSD and GBPUSD rising between 0.25-0.30%. While a bearish theme continues to dominate for cable, today’s positive session sees the pair break a losing streak of three consecutive sessions this week. As such, EURGBP continues to hover just above the multi-year support level of 0.8300.
  • USDCAD bucks the trend and has seen a solid move higher today following the BOC meeting yesterday. USDCAD has probed the week’s high of 1.3863 in recent trade and the technical set-up continues to lean bullish with firmer clearance here opening a key resistance at 1.3946 (Aug 5 high) after which lies the psychological 1.4000 mark.
  • Friday’s data highlight is Canadian retail sales, although German IFO and Eurozone M£ money supply data is also due, as well as US durable goods.
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  • US yields have reversed a small portion of this week’s march higher and accordingly, the USD index is roughly 0.3% lower on the session. Given the ongoing sensitivity of the Japanese Yen to movements in core yields, USDJPY has also sold off on Thursday, dipping 0.7% to trade back below 152.00 as we approach the APAC crossover.
  • The pair remains roughly 1.5% higher on the week and given the strong rally across October, initial support is not found until 150.50, Tuesday’s low and firm support remains much further down at 147.77, the 50-day EMA.
  • Yen volatility is likely to remain the clear focus for currency markets as the primary driver for sentiment remains core yields and next week’s busy calendar includes snap legislative elections in Japan, the BOJ decision and key growth & employment data prints in the US.
  • Broad dollar weakness was a consistent theme across the rest of G10, with the likes of EURUSD and GBPUSD rising between 0.25-0.30%. While a bearish theme continues to dominate for cable, today’s positive session sees the pair break a losing streak of three consecutive sessions this week. As such, EURGBP continues to hover just above the multi-year support level of 0.8300.
  • USDCAD bucks the trend and has seen a solid move higher today following the BOC meeting yesterday. USDCAD has probed the week’s high of 1.3863 in recent trade and the technical set-up continues to lean bullish with firmer clearance here opening a key resistance at 1.3946 (Aug 5 high) after which lies the psychological 1.4000 mark.
  • Friday’s data highlight is Canadian retail sales, although German IFO and Eurozone M£ money supply data is also due, as well as US durable goods.