Briefly on Wednesday, it looked as if the Dollar dip was over, but yesterday's red candle seems to have turned the tide. The reaction to the NFP numbers this afternoon (european) will finally tell us whether it's going to be a green or a red week for the Dollar. The decisive level to the upside is still 102.50 and as long the Dollar-Index is trading below I keep my bearish stance.
With respect to the EURUSD currency pair I keep watching the 50 ema (1.0737) carefully. Yesterday’s green candle amid better risk sentiment looks quite convincing and now higher spot rates would have to follow. However, if the market turns again today, it would be all the more painful. Anyway my base sceanrio is up from here.
The Dollar rally against Sterling stopped just above the mid Bollinger band (1.2464) on Wednesday. However, GBPUSD has yet to reclaim 1.2600 and as I wrote on Monday “Below 1.2600 I am cautious about longs”. That's why I'm cautious today, too, and won't be looking for longs here.
The USDJPY currency pair is trading around 130 at time of writing and my conviction of lower spot rates is fading away. It is now more likely that we will see a test of the multi-year high at 131.25 from April 28th. The volatility after the NFP numbers can be high. In this respect, it will be difficult to stop shorts on the upside. It's probably best to be flat today.
Yesterday’s positive risk sentiment is also reflected in the AUDUSD currency pair. A big green candle pushed the Aussie much higher yesterday to the key resistance zone between 0.7258 (200 dma), 0.7266 (recent highs) and the upper Bollinger band (0.7289). So this could be the end of the rally for now, but above the 0.7300 treshold you should get rid of shorts for now.
Have a nice weekend!
Sebbo