As risk appetite gets sapped on the day, that has seen dollar bids come back into the picture today as mentioned here.

In turn, it has pushed AUD/USD to fresh lows in four weeks as the pair now dips just below the 0.6900 handle. From a technical perspective, there isn’t much relief on the way down for the pair amid the latest retreat through to the May low at 0.6828 and then the trendline support level (white line) just below 0.6800.

Those will be key levels to watch as sellers stay in the hunt for the next downside leg. A lot will depend on how the risk mood evolves though and after some heavy selling in recent days, there might be scope for some reprieve. However, there is the Fed to contend with tomorrow and that is the bigger factor at the moment.

This article was written by Justin Low at www.forexlive.com.

There isn’t much that hasn’t already been said since last week. The ECB isn’t showing much signs of urgency to address fragmentation risks and they aren’t perturbed (yet) by the jump in periphery bond yields since Thursday last week.

For some context, 10-year Italian bond yields have jumped up by a staggering 67 bps since last Wednesday’s closing level. It’s all about this issue at the moment when it comes to European bond markets:

• ECB welcomes back an old friend

This article was written by Justin Low at www.forexlive.com.

The early gains have vanished in the equities space and there’s a general uneasiness on how things are going to play out when Wall Street comes into play later today. The mood right now feels like this:

A look at European indices is showing that the Eurostoxx is down 1.0%, the DAX down 0.8%, CAC 40 down 1.3%, UK FTSE down 0.6%, IBEX down 0.6%, and FTSE MIB down 1.3% on the day.

Meanwhile, S&P 500 futures have steadily dropped during the session as it erases its earlier 55 points gains to just 6 points now:

The only bright spot I can pinpoint is that the long-end of Treasuries are not selling off today, as the market sees a bit of a relief. 10-year yields are down 7 bps to 3.29%. That comes despite European bond yields continuing to track higher, with 10-year BTP yields up another 4 bps to 4.14% on the day.

This article was written by Justin Low at www.forexlive.com.

European indices have turned lower and US futures are now barely staying afloat as risk appetite is sapped in European morning trade. That is seeing dollar bids return and after some slight losses earlier, the dollar is now trading higher against the pound, loonie, aussie and kiwi.

Cable has seen a dip towards 1.2100 for the first time since May 2020:

As mentioned earlier here, the dollar’s earlier drop doesn’t hold much technical significance and owes more to the market seeking a bit of a breather. But as risk starts to show some nervousness again, it’s easy pickings for the greenback.

GBP/USD continues to look poised for a run towards 1.2000, all things considered.

Elsewhere, EUR/USD has also fallen from 1.0485 to 1.0435 at the moment while the yen is a notable beneficiary with bond yields (at the longer end of the curve at least) retreating on the session so far. USD/JPY is down 0.2% to 134.15 as the push and pull continues just below the 135.00 handle.

This article was written by Justin Low at www.forexlive.com.