Thursday, May 30, 2024
HomeFinance NewsDollar slumps as yields dip at the week's end.

Dollar slumps as yields dip at the week’s end.

The dollar is starting the European trading session on a decline as bond yields retreat from their recent highs. While the drop in 10-year Treasury yields is significant at 4.6 bps to 4.550%, the decrease in European 10-year German bund yields is even more pronounced at 9.4 bps to 2.873%. This drop may be partially influenced by a softer French inflation report, but it is also possible that month-end and quarter-end flows are impacting the market. As a result, traders are relying on technical analysis to navigate the current market conditions.

The EUR/USD pair has seen a gain of over 0.3% for the day and has surpassed its 100-hour moving average. This shift in momentum has made the near-term bias more neutral. However, there are significant option expiries at the 1.0600 level that may keep price action sticky around that figure. Additionally, there is resistance from the 200-hour moving average at 1.0616.

GBP/USD is also experiencing a similar pattern to EUR/USD, with a gain of 0.4% to 1.2240 levels. On the other hand, USD/JPY has dipped below 149.00 to 148.65, representing a 0.4% decline for the day. The antipodean currencies, such as AUD/USD, have seen the biggest gains, benefiting from an improved risk mood. AUD/USD is up 0.9% to 0.6480, but it still faces strong resistance at the 0.6500 mark.

In conclusion, the dollar has weakened at the start of European trading as bond yields decrease. The EUR/USD pair has surpassed its 100-hour moving average, while the GBP/USD pair is also gaining. Meanwhile, USD/JPY has dipped below 149.00, and AUD/USD is experiencing significant gains. Traders are relying on technical analysis and monitoring option expiries and resistance levels for guidance in the current market conditions.

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