May 16, 2022 17:39 GMT
- Broadly the US Dollar traded in a fairly tight range on Monday as the USD index looks to finish 0.2% lower after being confined to a 32-pip range on the day.
- At the same time, USDJPY experienced a decent amount of intra-day volatility as markets have become accustomed to over recent weeks. Risk-off flows overnight following the bleak Chinese activity data had prompted a move down to 128.70 for the pair, however these Yen gains were slowly unwound throughout European trade, with the move extending into the early NY session.
- The pair peaked two pips shy of the day’s high at 129.64 before reversing once more to trade around unchanged circa 129.20 approaching the APAC crossover.
- With the Euro still trading close to cycle lows, it is worth noting that technically, EURJPY remains vulnerable with the move lower last week marking an extension of the reversal from Apr 21.
- The cross has breached a number of important S/T support levels and additional weakness at this juncture would turn the focus to an important cluster of support between 132.66 and 1.3220.
- CAD (+0.44%) is the top performer of the majors today despite some signs of moderation in the housing market. Higher oil prices acting as a tailwind for the loonie as well as rising expectations of potentially bolder future action from the BOC. Initial support eyed at the 20-day EMA of 1.2842 for USDCAD will be eyed given the overall bullish outlook in place.
- RBA minutes are scheduled overnight before a busy European and US economic data docket. This includes UK and Eurozone unemployment as well as US retail sales for April.
- Fed Chairman, Jerome Powell, is due to speak on inflation at Wall Street Journal's Future of Everything Festival, in New York. Currently scheduled for 1400ET - audience questions are expected.