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The dollar and yen are keeping firmer once again today, with the aussie and kiwi lagging behin as major currencies continue to reflect a more risk averse tone.
That continues the trend from yesterday with the dollar now challenging several key levels on the charts, which may trigger stronger flows in the short-term at least.
- A break below 0.7000 spells more danger for NZD/USD
- EUR/USD hangs on by a thread as technical picture begins to sour
- AUD/USD challenges key support as sellers search for more downside momentum
- GBP/USD sellers look poised to keep the downside push going for now
There are a couple of flowing narratives in Asia and Europe contributing to the recent shakiness in risk sentiment. The former sees the BOJ and PBOC in particular not helping to keep the peace in the equities market with recent decisions.
Meanwhile, the latter saw a bit of scare from Turkey to start the week (there are still some hints of uneasiness) and also lockdown measures being extended into Q2.
In the US, things are still looking more optimistic in general amid stimulus measures and the expected economic rebound later in the year. But there is a sense of weariness among stock investors, with call option volumes on the decline:
Could it be a sign of the power of easy money starting to wane? Or perhaps the recent tantrum without the taper is starting to lead investors to being more cautious?
Either way, this might be a potential red flag for equities that things may not come by so easily moving forward despite the Fed support still being in play for now.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.