Trade ideas thread - European session 13 January 2021
Daily thread to exchange ideas and to share your thoughtsMajor currencies are little changed on the day after we saw turnaround Tuesday play out in what has been a mixed start to the new weeks so far.
The dollar eased while Treasury yields fell a little after a stronger auction and also as the Fed tempered with taper expectations a bit after recent remarks had gotten hopes up that a change in policy stance could come through later in the year.
From a technical perspective, the dollar moves present a bit of a challenge for dollar buyers after the recent push higher.
EUR/USD is now back up to test its 100-hour moving average @ 1.2211 while AUD/USD has moved up above both its key hourly moving averages (0.7736-41) to 0.7760-70.
Meanwhile, USD/JPY failed to breach its key trendline resistance levels above 104.00 and has retreated back below the figure level and below the 100-hour moving average @ 103.94, now trading to 103.70 ahead of European trading.
In short, the dollar run has lost some near-term momentum after having failed to clear key levels on the daily chart and the market has to reevaluate once again.
The pause in yields may be warranted but with the lack of follow through from the short-end of the curve, there are still questions to how sustainable the recent breakout can be - likewise, any potential for the dollar to continue to strengthen.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.