The risk sentiment went down originally due to higher rate hike expectations (high CPIs and Bullards comments last thursday) and rapidly worsened by the Russia-Ukraine conflict. This morning markets are cheering a somewhat fading risk from Eastern Europe and the Dollar consequently loses its safe-haven bids.
With respect to the narrative of the markets there is not much to say as you have to take it anyway. From a technical perspective however, there are now new opportunities to get into Dollar longs again, if you want to. Or you take a look into my last Market Update where I briefly discuss whether it is still worth buying FX Options to avoid directional risk.
EURUSD -- 1.1348
The 1.1300 treshold was under threat yesterday but the currency pair managed to close slightly above. The 50 ema (1.1355) and the high of yesterday (1.1369) should cap the rally for now. Above 1.1390/00 the short scenario is over for now.
GBPUSD -- 1.3552
Cable is trading well supported above the 1.35 mark where a lot of support has accumulated. The 50 ema (1.3513), the mid Bollinger band (1.3524) and the descending downtrend line (1.3508 ish) form a larger support zone. Anyway the currency pair can not make any real progress to the upside which tends to dampen my upward expectations. So I recommend to watch longs carefully and to rethink the situation below the 1.35 level.
USDJPY -- 115.61
It is possible that the Dollar has printed a double top against the Yen with the january (4th) and february (10th) highs at 116.35 respective 116.34. The red horizontal and the green ascending line however form an ascending triangle, albeit not very nicely, which makes a continuation of the prior trend (up) more likely. Protagnonist with a short bias should use the “double top” as a stop zone to reassess the situation.
Good luck,
Sebbo