Dollar maintains its position as the week's strongest major currency, although momentum has noticeably started to wane. The release of today's non-farm payroll report is poised to be a critical determinant in whether the greenback can sustain its near-term rally. However, market reactions could be complex, given that robust numbers could be seen as both a blessing and a curse, contingent on interpretation. The challenge lies in navigating the thin line of an optimal outcome for both the US economy and Fed, the so-called "goldilocks" scenario. In the rest of the forex markets, Swiss Franc and Euro are trailing closely behind Dollar as the next strongest currencies. Conversely, Australian Dollar currently sits at the bottom of the performance spectrum, with only a recovery in Copper prices breathing some life back into the currency. Following closely in terms of weakness is New Zealand Dollar, with Sterling securing the third weakest spot, despite regaining some ground from the post-BoE selloff. Canadian Dollar's performance remains mixed as it awaits its own employment data, while Yen continues to display near-term consolidation patterns. In a technical examination, USD/JPY has clearly experienced a slowdown in its upward momentum, ahead of 145.06 high. Even the surge in US 10-year yield, which broke a critical near-term structural resistance and reached its highest level since November, provided limited support. As it stands, further gains seem likely as long as 141.99 minor support remains intact. A rise beyond 143.88 would revive the rally and push for a retest of 145.06 high. However, strong break of 141.99 could indicate that the corrective pattern from 145.06 is commencing its third leg, possibly falling back towards 137.22/138.05 support zone. In Asia, at the time of writing, Nikkei is down -0.05%. Hong Kong HSI is up 1.22%. China Shanghai SSE is up 0.66%. Singapore Strait Times is down -0.20%. Japan 10-year JGB yield is down slightly by -0.0007 at 0.653. Overnight, DOW dropped -0.19%. S&P 500 dropped -0.25%. NASDAQ dropped -0.10%. 10-year yield rose 0.111 to 4.189. |
