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FOREX: USD Index Consolidates 0.5% Gains Post NFP, JPY Outperforms

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  • Following the stellar US jobs report, the greenback surged prompting the ICE dollar index to print a fresh cycle high of 109.97. While there was some intra-day volatility following the data release, the DXY looks set to post 0.5% gains on the session and confirm another positive weekly advance of around 0.75%.
  • Most G10 currencies have fallen as a result, with the likes of EUR and GBP printing cycle lows against the dollar in the process. EURUSD sank to 1.0215 before partially recovering but once again, it is sterling that stands out, with cable briefly printing below 1.22.
  • Weakness for equities have played their part here, and similar weakness for AUDUSD and NZDUSD is notable, extending multi-year lows below 0.62 and 0.56 respectively. CAD moderately outperforms following a similar impressive domestic employment report.
  • Standing out has been the Japanese Yen, which has outperformed significantly in the weak equity environment. Overbought conditions and intervention zone risks prompted an entire reversal of the post-data USDJPY rally. Spot reached as high as 158.87 in the direct aftermath but then slipped over 1%, picking up momentum through the Wed/Thu lows to print an intra-day low of 157.23.
  • This dynamic has prompted strong losses for the likes of GBPJPY, which extends its weakening trend amid the growing fiscal risks in the UK. The first major target on the downside would be 190.60 for the cross.
  • More immune to the equity sentiment, USDCHF continues to print fresh cycle highs above 0.9150, narrowing the gap to 0.9224/44, key medium-term targets for the pair.
  • China trade data crosses Monday and the focus for global markets will be centred around UK/US CPI scheduled on Wednesday. 
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  • Following the stellar US jobs report, the greenback surged prompting the ICE dollar index to print a fresh cycle high of 109.97. While there was some intra-day volatility following the data release, the DXY looks set to post 0.5% gains on the session and confirm another positive weekly advance of around 0.75%.
  • Most G10 currencies have fallen as a result, with the likes of EUR and GBP printing cycle lows against the dollar in the process. EURUSD sank to 1.0215 before partially recovering but once again, it is sterling that stands out, with cable briefly printing below 1.22.
  • Weakness for equities have played their part here, and similar weakness for AUDUSD and NZDUSD is notable, extending multi-year lows below 0.62 and 0.56 respectively. CAD moderately outperforms following a similar impressive domestic employment report.
  • Standing out has been the Japanese Yen, which has outperformed significantly in the weak equity environment. Overbought conditions and intervention zone risks prompted an entire reversal of the post-data USDJPY rally. Spot reached as high as 158.87 in the direct aftermath but then slipped over 1%, picking up momentum through the Wed/Thu lows to print an intra-day low of 157.23.
  • This dynamic has prompted strong losses for the likes of GBPJPY, which extends its weakening trend amid the growing fiscal risks in the UK. The first major target on the downside would be 190.60 for the cross.
  • More immune to the equity sentiment, USDCHF continues to print fresh cycle highs above 0.9150, narrowing the gap to 0.9224/44, key medium-term targets for the pair.
  • China trade data crosses Monday and the focus for global markets will be centred around UK/US CPI scheduled on Wednesday.