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FOREX: Greenback on Cusp of Resuming Uptrend

FOREX
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  • The greenback is reversing a decent part of Friday's pullback, keeping the broad dollar rally underpinned and the upside argument alive. The USD Index traded a new cycle high last week at 103.874, and a rally through here would resume the primary uptrend. We've written that better-than-expected US data is not the only driver of dollar strength, with domestic equity strength also playing a large part, raising the focus on the earnings schedule this week, across which 15% of the S&P 500 are set to report.
  • Running in tandem with the US curve, the greenback is further clawing back some of the modest USD losses posted Friday, easing EUR/USD off highs and tipping GBP/USD to new intraday lows in recent trade, characterised by very light volumes. This keeps GBP among the poorest performers of the day so far, while firmer core US yields keep USD/JPY pressed toward Y150.00.
  • 15min candle chart exposes weakness through 1.3023 support, exposing 1.3000/04 resistance. Any slip through 1.2961/74 would be a bearish signal and mark new monthly lows ahead of next week's budget release (Weds 30th) - through which FX could be more sensitive to volatility in bond prices given the upscaled focus on the release.
  • Datapoints are few and far between Monday, leaving focus on the central bank speaker schedule. Fed's Logan speaks before the open, Kashkari during cash equity trade, and then Schmid and Daly follow after the close. Schmid's appearance will likely be the most consequential - addressing the US economy and monetary policy outlook directly, with a released text. 
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  • The greenback is reversing a decent part of Friday's pullback, keeping the broad dollar rally underpinned and the upside argument alive. The USD Index traded a new cycle high last week at 103.874, and a rally through here would resume the primary uptrend. We've written that better-than-expected US data is not the only driver of dollar strength, with domestic equity strength also playing a large part, raising the focus on the earnings schedule this week, across which 15% of the S&P 500 are set to report.
  • Running in tandem with the US curve, the greenback is further clawing back some of the modest USD losses posted Friday, easing EUR/USD off highs and tipping GBP/USD to new intraday lows in recent trade, characterised by very light volumes. This keeps GBP among the poorest performers of the day so far, while firmer core US yields keep USD/JPY pressed toward Y150.00.
  • 15min candle chart exposes weakness through 1.3023 support, exposing 1.3000/04 resistance. Any slip through 1.2961/74 would be a bearish signal and mark new monthly lows ahead of next week's budget release (Weds 30th) - through which FX could be more sensitive to volatility in bond prices given the upscaled focus on the release.
  • Datapoints are few and far between Monday, leaving focus on the central bank speaker schedule. Fed's Logan speaks before the open, Kashkari during cash equity trade, and then Schmid and Daly follow after the close. Schmid's appearance will likely be the most consequential - addressing the US economy and monetary policy outlook directly, with a released text.