Insights 
VT 
The USD starts the new trading day on a lower note, with US stocks and yields also decreasing.
For EURUSD, the pair previously held firm above the April 15 low of 1.12657, rebounding from recent declines. Today, the pair is moving towards key moving averages, potentially turning the bias bullish if these levels are surpassed.
Usdjpy And Moving Averages
The USDJPY pair tested the 200-bar moving average on Friday but later rotated lower. Currently, the pair is testing the 100-hour moving average at 143.83. A break below could increase bearish momentum, with focus shifting to the 200-hour moving average at 143.37.
GBPUSD is trading near the day’s high, testing the 100/200-hour moving averages at 1.33249. Surpassing these would suggest a more bullish direction after maintaining above these averages on previous days.
In the stock market, the Dow has decreased by 275 points, while the S&P and NASDAQ are down by 48 and 212 points, respectively.
US debt market yields mostly decrease, with the 2-year yield at 3.795% (-4.5 basis points), 5-year at 3.895% (-3.6 basis points), and 10-year at 4.306% (-1.4 basis points). Only the 30-year yield shows a slight increase, at 4.802% (+0.7 basis points).
Looking At The Euro Rally
With pressure mounting on the Greenback, the tone across the majors hints at a shift that we’ve been anticipating. The drop in US bond yields, particularly at the short end, suggests that market participants are becoming more cautious about the Federal Reserve’s next steps.
Looking at the euro’s rally from the mid-April lows, it’s more than just a relief bounce. Momentum is beginning to build as we trade near key technical zones. Should we breach these averages cleanly, we’ll likely see increased interest from buyers previously sitting on the sidelines. The bullish door swings a tad wider if the next level holds.
The yen’s flirtation with its moving averages tells a story of a pair hesitant to commit. After failing to maintain gains above its longer-term average, it’s drifting towards levels that would typically invite sellers. A confirmed move below the hourly benchmark could encourage sharper downward moves, especially if US yields continue their downward track. That would align with the idea that rate differentials no longer support broad dollar strength.
Sterling’s position is perhaps the most technically clean of the three. Maintaining footing above these moving averages over several days speaks to underlying strength. A close above the current consolidation area would likely draw more upward pressure, especially if risk appetite improves in tandem. The chart shows that buyers have been defending dips with consistency, and that usually builds confidence.
The downward move in US indices—particularly in tech-heavy names—gives the sense that sentiment is shifting. The near 200-point drop in the NASDAQ and softness across the Dow and S&P aren’t noise; they’re signals that traders are beginning to reassess earlier optimism. We’ve noticed that equity weakness often triggers a belt-tightening across all speculative assets, which has knock-on effects in currency risk.
Yields, too, contribute to a clearer picture. The largest drops come from the 2-year and 5-year notes, which tells us that market sentiment is adjusting for a potentially slower pace of Fed action. The long end barely moves, which reinforces the idea that inflation expectations remain anchored. When rate expectations ease but inflation fears don’t spike, it tends to offer support to currencies like the euro and pound, which benefit from carry flows unwinding.
Volatility expectations may rise here, especially in FX options markets. With several pairs nearing important chart points, the next few sessions are going to be key to either confirm the recent turn or invalidate it. Our bias shifts accordingly—longer-duration setups now warrant closer attention, especially following false breaks seen in recent sessions.
It’s not just about directional plays but also timing. As these levels approach, we see value in staggered entries rather than chasing momentum. Patience may pay higher dividends, particularly given how US equity softness lines up with a softer dollar tone. Watch options positioning for confirmation—when the flow leans into one direction too heavily, reversals can cut deeply.
We approach this with measured caution. No need to overcommit, but ignoring these price actions would also be an error. Sometimes what isn’t moving is more revealing than what is. We keep the focus methodical, our charts clean, and our timeframes slightly wider than usual.
