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Summary: USDCAD Outperforms Following Data, USDJPY Extends Above 155.00

FOREX
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  • Despite the solid moves in core fixed income markets on Wednesday, G10 currencies traded in relatively narrow ranges. Higher yields have moderately benefitted the dollar index (+0.16%), whilst continuing to weigh on the Japanese yen.
  • USDJPY sprung to life approaching the US data, breaching the 155.00 handle for the first time since 1990. Stops may have been triggered through this mark, prompting an initial cycle high of 155.17. Despite the level breach, and trend conditions remaining firmly bullish, the pair had an immediate & sharp 35 pip turnaround to print 154.81 before the durable goods data release.
  • Since then, USDJPY has extended higher as we approach the APAC crossover. breaching to print a fresh high 155.37. Above here, there is nothing on the technical front until 156.00 and 156.47. The usual caution regarding both verbal and actual intervention will continue to be in focus as we approach Friday's Bank of Japan decision.
  • USDCAD (+0.28) received a boost following soft Canadian retail and manufacturing sales, leaving the Canadian dollar as the poorest performing major currency in G10. USDCAD has breached yesterday’s high of 1.3714 and a clear break opens 1.3855 next, the Nov 10 ‘23 high. Note that moving average studies remain in a bull-mode position, highlighting a clear rising trend.
  • Higher core yields appeared to have a greater impact on emerging market currencies, with the likes of MXN, PLN and ZAR all underperforming. USDMXN (+0.70%) in particular has risen back above the 17.00 mark and will eye another test of 17.3860, the Jan 17 high, which represents an important reversal trigger.
  • All focus turns to the advance reading of first quarter GDP in the US on Thursday, before Friday’s Bank of Japan decision.
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  • Despite the solid moves in core fixed income markets on Wednesday, G10 currencies traded in relatively narrow ranges. Higher yields have moderately benefitted the dollar index (+0.16%), whilst continuing to weigh on the Japanese yen.
  • USDJPY sprung to life approaching the US data, breaching the 155.00 handle for the first time since 1990. Stops may have been triggered through this mark, prompting an initial cycle high of 155.17. Despite the level breach, and trend conditions remaining firmly bullish, the pair had an immediate & sharp 35 pip turnaround to print 154.81 before the durable goods data release.
  • Since then, USDJPY has extended higher as we approach the APAC crossover. breaching to print a fresh high 155.37. Above here, there is nothing on the technical front until 156.00 and 156.47. The usual caution regarding both verbal and actual intervention will continue to be in focus as we approach Friday's Bank of Japan decision.
  • USDCAD (+0.28) received a boost following soft Canadian retail and manufacturing sales, leaving the Canadian dollar as the poorest performing major currency in G10. USDCAD has breached yesterday’s high of 1.3714 and a clear break opens 1.3855 next, the Nov 10 ‘23 high. Note that moving average studies remain in a bull-mode position, highlighting a clear rising trend.
  • Higher core yields appeared to have a greater impact on emerging market currencies, with the likes of MXN, PLN and ZAR all underperforming. USDMXN (+0.70%) in particular has risen back above the 17.00 mark and will eye another test of 17.3860, the Jan 17 high, which represents an important reversal trigger.
  • All focus turns to the advance reading of first quarter GDP in the US on Thursday, before Friday’s Bank of Japan decision.