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May 10 - 05:55 PM

EUR/USD - COMMENT-US Recap: EUR/USD Retreats After Hitting Flat After 11-Week High

By Randolph Donney  —  May 10 - 03:05 PM

The dollar index bounced slightly on Monday after hitting 11-week lows on continued fallout from disappointing non-farm payrolls, but sterling stole the show on further UK pandemic reopening nL8N2MX153 and less political uncertainty over Scotland.

EUR/USD's 1.21785 high on EBS only marginally overtook Friday's 1.12715 peak.
Further examination of Friday's disappointing jobs data and comments by Dallas Federal Reserve Bank President Robert Kaplan nS0N2LF00H helped Treasury yields to rebound and the dollar recoup early losses.

A rise in the Conference Board's Employment Trends Index of 2.7% on the month and 45.7% year-on-year and showing "no signs of slowing job growth" also helped nPn7bYX1za.

The dollar's rapid fall may have created sufficiently oversold conditions to cushion its fall ahead of Wednesday's CPI and Friday's retail sales reports nL1N2MX176.
But with the dollar index's rise on Monday capped by the up trendline from January it tumbled below on Friday, recovery expectations are subdued.

Sterling's powerful 1.2% rise, its biggest since Jan.
12, and the breakout toward February's nearly 3-year peak at 1.4240 was powered by ebbing Scottish independence angst nL1N2MX13P and further pandemic reopening.

Cable is becoming overbought and probed the broken up trendline from November that limited recoveries in April.
On Tuesday, the trendline will be at 1.4159, just above Monday's high of 1.4148 high.
Failure to close above that trendline could trigger a pullback before this year's 1.4240 peak is retested.

USD/JPY rose 0.23%, helped by the intraday rebound in Treasury yields.
After falling as far as 108.47, USD/JPY found buyers at the up trendline from January that has been probed but not closed below yet.
But top-heavy techs mean the burden of proof is on bulls with prices below the daily cloud top and other hurdles just above 109 nL1N2MX1HN.

AUD/USD gave up most of its early gains after nearly reaching the 76.4% Fibo of February-April slide at 0.7895 and as copper and some other commodity prices came off their highs and USD/CNH held just above its up trendline from 2014 and 2018 lows.

Ether gained 18%, clearing the 4k hurdle and again widened its performance gap over bitcoin, which was down 1.8% and well off its record highs scored in April.

The data calendar in the U.S. is light until Wednesday's CPI report, though Friday's retail sales, the key driver of GDP, is likely to gain more attention.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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