Higher yields is the key theme to take note of for today, as 2-year and 10-year Treasury yields are revisiting pre-pandemic levels. The former is back above 1% while the latter is up to as high as 1.84% earlier in the day, currently seen around 1.82%.

That has weighed on the mood in equities and kept the dollar in a slightly more favourable position to get things going.

EUR/USD is in a bit of a flux, holding around 1.1400. But GBP/USD is pressured lower after being rejected by its 200-day moving average last week and is now facing a key near-term test:

GBPUSD H1 18-01

Price is knocking on the door of its 200-hour moving average and a break below that will see the near-term bias turn more bearish instead. That will be the key level to watch in the sessions ahead.

Meanwhile, USD/JPY is trading up to 114.80 levels after a bounce from earlier but upside remains capped closer to its own 200-hour moving average near 115.00:

USDJPY H1 18-01

The 50.0 retracement level of the recent downswing @ 114.92 will also help to add to resistance on the daily.

As risk tones are more subdued with equities slumping in the wake of higher yields, that is putting pressure on commodity currencies as well today. The aussie and kiwi are the slight laggards but the loonie is holding up thanks to higher oil prices. Of note, USD/CAD is continuing to test its 200-day moving average @ 1.2498 at the moment:

USDCAD D1 18-01

That will be a key one to watch going into the close for the pair.