The dollar rebounded against the euro and pound on Monday but slid versus the yen and Swiss franc, as safe-haven flows dominated the market on disappointing Chinese economic data nL1N2PN03I, pandemic anxiety and concerns about Afghanistan nL1N2PL01V.
A big pullback in the NY Fed's Empire State August manufacturing index nN9N2NL008 added to concerns after Friday's report of imploding U.S. consumer sentiment.
EUR/USD fell 0.14% after running into resistance ahead of Friday's 1.18045 high by the 50% Fibo of the July-August 1.1909-1706 drop at 1.18075.
The July-August drop and subsequent rebound has left a double-bottom in place by March's 1.1704 low, which is near the 38.2% Fibo of the 2020-21 pandemic range at 1.1695.
That and bullish divergences from daily RSIs in July and August raise questions about the downtrend since, which was premised on mostly better-than-forecast U.S. data and rising Fed tapering expectations.
Monday's 1.1767 low was a 38.2% Fibo of the last week's 1.1704-8045 rebound.
Rising COVID concerns will heighten interest in U.S. retail sales, industrial production and Fed Chair Jerome Powell's comments on Tuesday, with the market still pricing in the first rate hike for late 2022 and economists expecting tapering to begin toward the end of this year nW1N2P603K.
USD/JPY fell 0.35%, with the slide from Friday's 110.465 high on EBS to Monday's 109.115 low reaching 1.2% and the lowest since the Aug.
4 monthly low at 108.725.
The rates and risk-sensitive USD/JPY was sped lower by early weakness in stocks after poor Chinese data and as 10-year Treasury yields Monday retraced 61.8% of their 1.127% to 1.379 Aug.
4-12 rebound with today's 1.223% low.
The yen was in high demand across the board as carry and risk-on trades were pruned.
But even after an afternoon recovery in U.S. stocks, USD/JPY was still down by its 76.4% Fibo of August's recovery at 109.215.
Some consolidation ahead of Tuesday's event risks makes sense, but August and May's lows will be in play if Tuesday's U.S. data also disappoint and Powell doesn't reinforce recent tapering talk from other Fed members nL1N2PN12Z.
Sterling fell 0.16%, with the 1.38775 high matching Thursday's high and still tucked below the daily cloud cover and falling 55-day moving average near 1.39.
UK jobs data is on tap Tuesday.
As a gauge of risk acceptance, GBP/JPY bares watching, particularly given July and August recovery highs faltered into cresting 55- and 100-day moving averages that hint at a major move lower.
Aussie fell 0.47%, undermined by Chinese growth concerns and ongoing Australian pandemic struggles nL1N2PM0RX.
RBA meeting minutes are out Tuesday, but rate hikes are not on the table until the pandemic is effectively dealt with via vaccinations rather than ongoing lockdowns.
Bitcoin and ether backed off early highs, with ether running into resistance by the 61.8% Fibo of its May-June plunge at 3,356 for a fourth consecutive day.
Energy prices recovered some early losses on global COVID concerns after OPEC+ rejected the U.S. request for more supply nL1N2PN1HY.
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