The dollar is seeing a modest short-covering rally at midday in New York as US equities shed about 2/3rds of their early gains. The S&P is up 0.5% at the moment and EUR/USD has pulled back to 1.3760 from 1.3795. USD/JPY has not bounced at all, weighed down by EUR/JPY position -squaring. Typically, USD/JPY does badly as the Japanese economy does badly, and based on last night’s GDP, Japan is doing pretty damn badly.
Should USD/JPY find its mojo, 95.40/45 is first resistance. 94.50 is solid support near-term but some stops are perched below that level.
