Dollar keeps steadier so far on the day

The dollar is mostly a little higher across the board today but is it all just a brief respite? The greenback opened with a gap higher on Monday thanks to Trump’s tariff threats but that has faded away and then some over the last few days. The drop in Treasury yields yesterday only served to compound the dollar’s woes with USD/JPY briefly slipping under 152.00 earlier in Asia trading.

So, where does that leave us now?

For the time being at least, the dollar is keeping steadier today. However, it’s not suggestive of much relief. I still believe this development here in the bond market is going to be crucial in deciding how the dollar fares before the weekend.

Despite some relief now, the dollar is in a vulnerable spot. Trump’s tariff threats are subsiding and yields are breaking below a crucial threshold. It’s now over to economic data to salvage something for the dollar. Otherwise, it’s tough to see the downside pressure relent unless Trump stirs up more of a ruckus again before the weekend.

EUR/USD is in an interesting spot though with the pair nudging back just under 1.0400 on the day. Near-term price action is now more neutral, resting in between its 100 (red line) and 200-hour (blue line) moving averages.

It’ll be important to keep an eye out on the former to see if buyers will keep the bounce on the week with US data in focus over the next two days.

Meanwhile, USD/JPY is also at a very crucial point on the charts with the pair contesting its key daily moving averages:

That’s a major one to watch as a break below could lead towards a push to 150.00 next for the pair.

This article was written by Justin Low at www.forexlive.com.