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FOREX: USD Index Extends October Rally to 3%, USDJPY Back Above 150.00

FOREX
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  • The dollar index has firmed again today, extending its impressive rally across October to 3%. The greenback was underpinned by firmer-than-expected US retail sales data and below consensus initial jobless claims which has notably boosted USDJPY back above the 150.00 handle, to highs of 150.30.
  • The recent break of the 50-day EMA, marks a bullish development that undermines a bearish theme and highlights a stronger reversal. Sights are on 150.76, the 50% retracement of the Jul 3 - Sep 16 bear leg.
  • Elsewhere, the ECB rate cut and press conference closely matched expectations which has allowed the Euro’s bearish momentum to continue during today’s session. EURUSD fell as low as 1.0811, extending the move below initial support and narrowing the gap to both the 1.0800 mark and 1.0778, the Aug 1 low, and next key support.
  • Euro weakness was broad based, with EURGBP breaching the week’s low to reach a low of 0.8319, just 8 pips above key support at 0.8311, the lowest level for the cross since April 2022.
  • EURAUD (-0.75%) is a standout underperformer on the session following the stronger-than-expected Australian employment data. The cross has now slipped below 1.6200 and markets will remain focused on the key medium-term inflection point at 1.6000.
  • In emerging markets, USDMXN briefly rose above 20.00 and looks set to an impressive 4 day winning streak, which has seen the week’s range stretch to over 4%. Price action highlights a dominant uptrend and a continuation higher would expose key resistance and the bull trigger at 20.2181, the Aug 5 high.
  • Friday’s focus will be on China activity data before UK retail sales figures for September and US building permits.
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  • The dollar index has firmed again today, extending its impressive rally across October to 3%. The greenback was underpinned by firmer-than-expected US retail sales data and below consensus initial jobless claims which has notably boosted USDJPY back above the 150.00 handle, to highs of 150.30.
  • The recent break of the 50-day EMA, marks a bullish development that undermines a bearish theme and highlights a stronger reversal. Sights are on 150.76, the 50% retracement of the Jul 3 - Sep 16 bear leg.
  • Elsewhere, the ECB rate cut and press conference closely matched expectations which has allowed the Euro’s bearish momentum to continue during today’s session. EURUSD fell as low as 1.0811, extending the move below initial support and narrowing the gap to both the 1.0800 mark and 1.0778, the Aug 1 low, and next key support.
  • Euro weakness was broad based, with EURGBP breaching the week’s low to reach a low of 0.8319, just 8 pips above key support at 0.8311, the lowest level for the cross since April 2022.
  • EURAUD (-0.75%) is a standout underperformer on the session following the stronger-than-expected Australian employment data. The cross has now slipped below 1.6200 and markets will remain focused on the key medium-term inflection point at 1.6000.
  • In emerging markets, USDMXN briefly rose above 20.00 and looks set to an impressive 4 day winning streak, which has seen the week’s range stretch to over 4%. Price action highlights a dominant uptrend and a continuation higher would expose key resistance and the bull trigger at 20.2181, the Aug 5 high.
  • Friday’s focus will be on China activity data before UK retail sales figures for September and US building permits.