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FX is still looking a little stuck to start the week, though the dollar is keeping in a decent spot as the market battles between Fed taper expectations and delta variant concerns.
EUR/USD is treading water to fresh lows since 1 April and the end-March lows @ 1.1704-11 will be a key focus in terms of support on the technical front for the pair. But so far today, there isn’t much action as the pair keeps within a 7 pips range of 1.1733 and 1.1740.
The bond market also offers an interesting play for yen pairs as 10-year Treasury yields look to try and keep above 1.30% and its 200-day moving average.
CAD/JPY and GBP/JPY are keeping just below the highs seen in late July and a push to break above that could see a more extended move follow through. Likewise for USD/JPY if the pair can push/break above 110.50 and the 23-26 July highs @ 110.58-59.
Besides that, AUD/NZD shorts/sell-on-rallies are still a preferred trade option. Buyers managed to seize back some near-term control earlier today but the 200-hour moving average sits @ 1.0516 and could limit further gains.
Elsewhere, the bounce in oil off the July lows is at least helping to keep dip buyers invested but my conviction isn’t quite as strong at this stage. I’m siding more towards profit-taking (via scaling) at shallower levels than targeting fresh cycle highs for now.
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