The important 102 treshold has held in the dollar index (DXY) and dollar bulls could relax a bit. With the U.S. on vacation, I do not expect any major price movements over the next two days. Finally, starting Wednesday, we could see if July will continue June (Risk on, Implied Vols and VIX down), or if a risk reassessment will take place. My Twitter timeline at least seems convinced that there will be a July rally, which should then also be reflected in a weaker dollar again. This does not correspond to my opinion, but in the end, July may well bring a summer market.
EURUSD -- 1.0879
At 1.1012, the rally was over for the time being. But the currency pair is still trading in bullish territory above the 50 ema (1.0857) and the mid Bollinger band (1.0867). From a technical perspective it is time to look for euro longs with a stop below Friday’s intraday low at 1.0835. In the bigger picture the upper end of the recent 1.0500/1.1000 range was rejected and the downside could come into play again.
GBPUSD -- 1.2672
The currency pair has had a small correction, which may have ended with the big green candle on Friday. Below Friday’s intraday high at 1.2728, however, you can still try Sterling shorts. The interims high of May 10 (1.2680) and the mid Bollinger band (1.2663) could still be a hurdle. Below the 1.2599/91 support zone, it becomes thin for the bulls.
USDJPY -- 144.80
Last week Friday's CPI numbers showed more of a picture of easing versus analyst expectations. This should support the currency pair for the time being, because possible interest rate steps by the BoJ are again seen as less likely. Nevertheless, a core inflation rate of 3.8% does not justify a key rate of -0.1% in my opinion. Moreover, there have recently been rumors that the BoJ might intervene in the FX market. Unfortunately, both points cannot be traded. The BoJ may confirm its expansionary policy also at the next interest rate meeting (03aug; see G10 Central Bank Calendar). And the last time there were rumors of intervention, it took several big figures and twelve green daily candles in a row before the BoJ actually reacted.
Good luck,
Sebbo