A couple of more hawkish Fed talk and a further drop in equities is fueling the next leg higher in the dollar now. The greenback saw a couple of key technical breaks at the end of last week but it took a while before they started running this week. But now that it has, we are seeing a push to the next set of key levels.
USD/JPY in particular is closing in on testing the 140.00 mark next with more hawkish Fed talk and a move higher in Treasury yields helping with the mood as well.
Meanwhile, EUR/USD is sinking further to fresh lows in two months and building on the break below its 100-day moving average and the 1.0800 mark. GBP/USD is also contesting its 10 April low of 1.2344 and a hold below that is likely to see the pair drop further towards its own 100-day moving average at 1.2283 currently.
Looking at commodity currencies, USD/CAD is also seeking a breakout of key trendline resistance from its March and April highs, pushing just above 1.3600 now.
Then, AUD/USD has broken down to fresh lows for the year in a drop below the support region of 0.6563-73. The 0.6500 level is the next key target for the pair. And we also have NZD/USD which is contesting a break below 0.6100 after the sharp fall yesterday, with a break there likely to see the pair move towards 0.6000 next.
I’ll put up the individual charts in the session ahead but for now, the technical signs are certainly favouring the dollar.