The dollar fell in trading yesterday alongside Treasury yields, as Fed chair Powell reaffirmed a somewhat more dovish position. At the balance though, I'd say he offered up something on both sides of the Fed outlook. It just comes down to how you'd want to read it. But amid a lack of other catalysts this week so far, we're seeing the dollar bounce back in what has been a mixed first half of the week.
The greenback was a lower in the first two days but is making back some decent ground today in European trading. EUR/USD is now down 0.4% to 1.1770, not helped by a poor German Ifo business survey here. But elsewhere, we're also seeing GBP/USD down 0.3% to 1.3477 and USD/CHF up 0.4% to 0.7940 on the day.
And even with Treasury yields not getting up to much today, USD/JPY is also marked up by 0.4% to 148.27 currently. This is one pair that will continue to intrigue this week as it once again closes in on the 200-day moving average (blue line), seen at 148.50 currently.
The pair has largely been in consolidation mode since July and is tucked in nicely between the 100-day (red line) and 200-day moving averages. From a pure technical standpoint, the next trending and big move will come from a firm break on either side. So, that is one to keep an eye out for as price action narrows further into the US jobs report next week.
