Classic risk-positive trade wins out
![NZDJPY weekly chart](http://az705044.vo.msecnd.net/20210625/nzdjpy-weekly-chart-june-25.png)
The top performing G10 currencies this week were NZD, AUD and CAD, in that order. At the bottom of the list were JPY, USD and CHF.
That's a classic risk-positive trade setup that has been underlined by the selloff in bonds and the best week for US equities since April. It's a clear signal that the market feels it overreacted to the Fed, perhaps with a short-squeeze adding to moves.
The mode now is to wait and watch on economic data, particularly jobs and inflation to get a sense of when the Fed will hike next. If NZD/JPY is any indication, we're not out of the woods yet. The pair recovered from last week's slump but is now right where it was before the FOMC.
The back-to-back big moves in consecutive weeks cancelled one another out and leaves the market uncertain. There's a chance the range over the past month could persist through the summer.