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Narrow Ranges for G10FX, EURUSD Fresh Year Lows As 1.1500 Support Holds

  • A solid NFP print with complimentary stellar revisions initially boosted the US dollar on Friday. However, major currencies lacked the appetite for any sustained reactions, prompting the greenback to gradually unwind throughout the remainder of the session.
  • This price action was mirrored by EURUSD, making fresh 2021 lows post the data at 1.1514. Strong support at the 1.15 handle capped the dollar strength and the pair reversed back to 1.1550. The focus will remain on 1.1493, the 50.0% retracement of the Mar '20 - Jan '21 bull phase. A break of this level will be needed to confirm the resumption of the underlying downtrend.
  • The gradual unwinding of dollar strength supported the Japanese Yen, which was the clear outperformer on Friday, rising 0.35%. If USDJPY were to close here around 1.1340, it would be the lowest daily close since October 13. Clearance of the 1.1300 support zone would signal scope for a deeper pullback and open 112.08, Sep 30 high and a recent breakout level.
  • The bolstered risk profile was most evident in the emerging market currency space, with the JPMorgan EM Currency Fund up 0.62% approaching the close. Notable +1% rallies in MXN and ZAR underpinned the improved sentiment.
  • Lots of Fed speakers, including Chair Powell, kick off a data light Monday next week. Wednesday's US CPI data will headline the calendar before the North American holiday on Thursday.

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