FOREX: Broad Greenback Weakness Resumes Amid Equities Rally
Apr-14 09:32By: Jack Lewis
Cross Currency Pairs+ 1
- Carryover from the tariff reprieves for key tech products (released late on Friday) has aided sentiment to start the week, with the major equity benchmarks rallying and the greenback trading with an offered tone. This has allowed the USD index edge back below the 100.00 mark, narrowing the gap to Friday’s cycle low at 99.01. 10-year treasury yields are 4bps lower on the session, providing an additional dollar headwind.
- The key mover on the session is the Japanese yen once again. After gapping higher at the open to levels around 144.30, USDJPY has steady sold off, seeing the pair reach as low as 142.24 before stabilising. Price action fell just short of the 142.02 lows from last week. The trend condition remains bearish, and sights are on 141.65 next, the Sep 30 ‘24 low.
- Boosted risk sentiment has provided another boost for NZDUSD, which has risen ~1% Monday. The recovery seems to have boosted by further short covering above 0.5850 and returns to levels last seen in December, just below the 0.5900 mark.
- In tandem, GBP has been another beneficiary as cable approaches the 1.32 handle once more. Overall, with reciprocal tariffs delayed, GBP is rallying well - underscoring GBP's correlation with risk - which looks through only marginal tweaks to monetary policy pricing. Technically, moving average studies remain in a bull mode position that highlights a dominant uptrend. An extension higher would open key resistance and the bull trigger is 1.3207, the Apr 3 high.
- EURUSD has tracked back to the 1.14 handle, however, the pair remains comfortably off the 1.1473 cycle highs. As a reminder, most recent price action has seen EURUSD substantially narrow the gap to 1.1495, the Feb 10 2022 high and a key medium term technical point. Should the volatile price action continue, a Fibonacci projection level at 1.1555 is notable above here. Initial support lies at the 1.1144 breakout level.
- Highlights on Monday will be on central bank speakers, with Fed’s Waller and Harker scheduled.
