The USD has pushed to new highs as the market reacts negatively to the five-year inflation expectations from the Michigan sentiment index which rose to 3.2% from 3.0% last month. The level is the highest since 2011. That has spooked the market.
Yields are moving higher:
- 2 year 3.980% +7.5 basis points
- 10 year 3.442% +4.3 basis points
- 30 year 3.766% +2.3 basis points
In the forex:
- EURUSD is training to a new session low and test the 38.2% retracement of the move up from the March low at 1.08735. The low price just reach 1.08756. Move below opens the door for further selling from a technical perspective.
EURUSD breaks lower this week and test 38.2% retracement
- USDJPY: The USDJPY is breaking away from its 200-hour moving average for the 1st time this week. That moving average comes in at 134.952 (see green line in the chart below). Recall from earlier this week, the price used the 200 hour moving averages resistance. The price is entering into a swing area between 135.135 and 135.36. The high price on Wednesday did move above that area only to fail sending the price lower. It moved back above that level and the high from Wednesday at 135.46 would open the door further upside momentum.
USDJPY moves above 200 hour moving average
- GBPUSD: The GBPUSD is moving to a new session low and in the process has broken back below the 1.25000 level. THe price earlier today move below that level but bounced back higher. This is the 2nd try. The next target comes in at 1.24717 which is the 61.8% retracement of the move up from April 10.
GBPUSD looks to test 61.8% retracement
- NZDUSD: The NZDUSD is a big mover today falling -1.59% on the day. Lower inflation numbers in NZ started the ball rolling. Technically, the price fell back below its 100 day moving average and has continued the move lower below the 50% of the range since the April low at 0.62475, the 61.8% retracement of the same movement 0.62155, and a swing area between 0.6201 and 0.62108. The low price reached 0.61944 so far..
NZDUSD tumbles lower
Fed probability numbers now show:
- 10% probability that the Fed looks rates by 25 basis points in June, but
- 71 basis points are still priced in for the end of the year.
This article was originally published by Forexlive.com. Read the original article here.