The dollar is putting on a solid defense of key levels since last week and Friday's hot US jobs report really helped to tip the scales in favour of the greenback. The currency is higher again today, helped by a more subdued risk mood with both bonds and equities trading lower in European morning trade.
S&P 500 futures are now down 31 points, or 0.8%, while 10-year Treasury yields are up 6.5 bps to 3.591% currently. That is putting the dollar in a firm spot with the charts also helping to solidify a case for a stronger rebound perhaps. Let's take a look.
EUR/USD is seeing a firm rejection at the 1.1000 mark with the weekly close last week also falling short of firmly breaking the 50.0 Fib retracement level of the downswing since 2021 at 1.0942. Adding to that, the 100-week moving average (red line) is also still in play and sits just above 1.1000 for now.
As such, sellers are still staying in the game despite a promising run higher in the early half of last week.
The more dovish BOE is not really providing much assistance for the pound, as cable runs lower in the past few days towards the 1.2000 level again. The start of the year rally failed to result in anything significant as the December highs at 1.2443-46 held and that remains the key upside resistance to watch for now.
Moving over to AUD/USD, the pair looked like it was ready to rip higher in the past two weeks but the August highs at 0.7125-36 is preventing an extended breakout it would seem. The softer risk mood at the end of last week was a drag alongside the stronger dollar, resulting in a fall back below 0.7000.
For buyers, the key downside risk level to watch will be the 200-day moving average (blue line) just above 0.6800 now.
Then, we also have NZD/USD which has failed on multiple occasions now to find a firm break above 0.6500 since January. The huffing puffing continued last week before the Friday drop looks to prove to be a firm rejection of the key level. For buyers, the key downside risk level to watch will be the region around the December and January lows at 0.6190-30 with the 200-day moving average (blue line) at 0.6188 currently also one to be mindful of.