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The dollar is in relatively good standing but not really achieving too much technically just yet on the week. Fed policymakers are still making the case for a taper by year-end and the market will have to contend with that ahead of the FOMC meeting later this month.
Risk tones are also facing a bit of a loss in momentum, so that is something to be mindful about in case the subdued tones lead to more profit-taking in the short-term.
Essentially, the market looks to be feeling things out still amid a lack of key catalyst on the week. Treasuries were a key spot to watch but 10-year yields have moved away from resistance near 1.38% to 1.33% today, keeping its recent range.
There is the case for the dollar to keep firmer amid a slightly more defensive risk tone as equities take a bit of a breather. But there needs to be more to suggest any meaningful direction as we are still just getting a lot of noise in FX for now.
At least yen pairs are keeping things interesting though with AUD/JPY retreating further from a test of its 200-day moving average to 81.00 today while CAD/JPY is inching back closer towards a test of its own 200-day moving average at 86.16.
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