FOREX: USDJPY Volatile Overnight, USD Index Threatens Close Below 20-Day EMA
Jul-10 09:25
- The dollar tilts marginally lower again on Friday owing to another dip lower for crude futures and slightly lower US yields on the session. The aggressive move south for USDJPY overnight prompted the DXY to break out of its contained range this week, and print a 100.60 low which closely coincides with the lows from last week.
- Subsequently, we have moved back into the prior 100.80-101.20 range. This consolidating price action keeps 20-day EMA support intact on a closing basis, and the bullish trend in place for now.
- USDJPY volatility was stoked by comments from Finance Minister Satsuki Katayama, who said the government wants to encourage pension funds, including the Government Pension Investment Fund, to increase investment in domestic financial assets.
- USDJPY feel from levels around 162.40 to session lows of 161.29, before slowly grinding back to current levels around 161.70. Overall, a bullish theme remains firmly intact and key support is not seen until 160.39, the 50-day EMA.
- Alongside the contained price action for the dollar overall, EURUSD has had an extremely slow week trading within a 70pip range. While a short-term corrective cycle is in play, and there have been technical threats of a stronger recovery, a bearish trend condition remains intact overall, bolstered by some notable weakness in the crosses. We have flagged the recent medium-term breakdown for EURGBP through 0.8610, and a lower low in every session this week underscores the bearish momentum.
- Elsewhere, AUDNZD continues its weakening trend overnight, falling as low as 1.2014 in APAC trade. Momentum may have picked up on a break of trendline support, and the cross has significantly narrowed the gap to next key support at 1.1985.
- Canada June employment data headlines the Friday calendar.
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FOREX: FX OPTION EXPIRY - Large in the EUR on Monday
Jun-10 09:18
Of note:
EURUSD 1.31bn at 1.1545/1.1550.
USDJPY 3.3bn aty 160.00/160.50.
EURGBP 1.12bn at 0.8650 (thu).
USDCNY 1.16bn at 6.7000 (thu).
EURUSD 2.76bn at 1.1500 (fri).
EURUSD 4.37bn at 1.1500 (mon).
- EURUSD: 1.1500 (455mlnm), 1.1545 (631mln), 1.1550 (683mln), 1.1560 (903mln).
- USDJPY: 160.00 (1.52bn), 160.25 (619mln), 160.50 (1.16bn).
- GBPUSD; 1.3350 (391mln).
- USDCAD: 1.3950 (421mln).
- NZDUSD: 0.5775 (460mln), 0.5800 (476mln).
- USDZAR: 16.5000 (305mln).
FOREX: US Dollar Consolidates Ahead of US Inflation Data
Jun-10 09:09
- G10 FX has exhibited tight ranges overnight as the market continues to digest the back and forth in the Middle East and awaits May inflation data from the US. The DXY is consolidating around the 99.90 mark and continues to hold the bulk of its post-NFP advance. This keeps a short-term bullish theme intact as we approach the week’s key US release, and the DXY focus will remain on the year’s best levels just above the 100.50.
- While a 20-pip session range for USDJPY is nothing to get excited about, the pair continues to trade just below 160.50 which should provide further discomfort for Japanese officials. Finance Minister Katayama has stated there remains no change in the stance of being ready to take bold FX action. A test above the pre-intervention high of 160.72 will likely stoke additional volatility in the pair.
- The current uptrend in USDCAD remains intact ahead of today’s BOC decision where markets and analysts expect the Bank to maintain its overnight rate for a 5th consecutive decision at 2.25%. Attention remains on key resistance at 1.3967, the Mar 31 high. A clear break of it would strengthen a bullish theme and pave the way for an extension towards 1.4015, the Dec 2 2025 high.
- The stronger than expected CPI-ATE inflation reading in Norway has assisted a small bid for the Norwegian krona, with NOKSEK rising 0.35% back towards parity. While price action has helped EURNOK edge off a fresh recovery high of 11.0065 this morning, recent technical breaches keep a short-term bullish theme firmly intact.
- EURCHF notably extends its short-term upwards momentum Wednesday, narrowing in on the cluster of highs between 0.9250-65. Bullish price action comes ahead of key catalysts over the next week including the Swiss vote on a population cap and the SNB meeting.
ITALY T-BILL AUCTION RESULTS: 12-month BOTs
Jun-10 09:03
| Type | 12-month BOT |
| Maturity | Jun 14, 2027 |
| Amount | E8.5bln |
| Target | E8.5bln |
| Previous | E8.5bln |
| Avg yield | 2.695% |
| Previous | 2.699% |
| Bid-to-cover | 1.43x |
| Previous | 1.44x |
| Previous date | May 12, 2026 |
