It all depends on what’s happening with bonds right now, with US Treasuries still being sold off and that supporting the dollar. The US 10-year bond yield may fall slightly today, but it is still early days and is expected to remain at around 4.52% for now. This has affected the overall market, with stocks falling again yesterday and the dollar remaining stable.
EUR/USD is currently at its lowest since March and is next slowly moving towards February and March lows around 1.0516-36.
EUR/USD daily chart
At this stage, it remains extremely difficult to be bearish on the dollar. There is too much going in favor of the US dollar, especially when you also consider the charts.
And that’s despite the fact that USD/JPY is currently trading around 149.00, in USD/JPY intervention territory. Had they not feared Japanese intervention, the dollar would certainly have been much higher, and that speaks volumes about how traders currently view the dollar, even if the gains were more speculative. ing.
And, as Adam outlined here, risk strategies may present further difficulties in the future, as stocks have fallen significantly amid a possible technical break. And such a scenario would provide further tailwinds for dollar strength.
The next big data for the US will be released in the October 6th jobs report, with some smaller employment details expected in the days before then. But as for this week, the only thing really standing in the dollar’s way is month-end flows as the dollar continues to stay in the driver’s seat.
