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Friday, April 30, 2021

Only one day left for the Dollar to avoid any residual month...

Only one day left for the Dollar to avoid any residual month...

Only one day left for the Dollar to avoid any residual month end selling, and so far its holding above support as it continues to counter bearish rebalancing signals and the ongoing dovish overtones imparted by the Fed with some assistance from a back-up in yields and curve re-steepening.

However, the Buck is also benefiting at the expense of others and a degree of consolidation or corrective price action approaching the end of a 4th successive week of depreciation. Looking at the DXY as a proxy, a marginal new recovery high from sub-90.500 lows in the index was forged at 90.815 after the Euro filled remaining bids in to 1.2100 and tripped a layer of stops on the back of weaker than forecast prelim.

However, EUR/USD has found a base nearby and 2.1 bn option expiries at the round number could be keeping the headline pair underpinned alongside bids in the EUR/GBP cross around 0.8700 that may be due to RHS fix and/or month end demand.

Accordingly, Sterling is facing a task to retain grip of 1.3900 vs the Buck after topping out below yesterday’s 1.3975+ peak and failing to breach a double top against the Euro circa 0.8674, irrespective of Pound positives in the form of a super strong Nationwide UK house price survey and upbeat Lloyds business barometer.



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