Bond yields are sitting higher after the UK CPI report earlier and that is helping to prop up USD/JPY a little. The pair is up 0.2% to 156.47 as it continues to close in on last week’s high at 156.78. This comes with 10-year Treasury yields being up 2.9 bps to 4.443%.

Besides that, the greenback is holding a light advance against the likes of the euro, franc, aussie and loonie. It is up just 0.1% against those currencies.

The pound and kiwi are the only ones seen higher against the dollar but they owe to other instances. And even then, we’re seeing both currencies lose some ground after earlier gains as well.

GBP/USD is down to 1.2728, up 0.2% on the day, after a high of 1.2761 earlier following the UK CPI report. Meanwhile, NZD/USD is down to 0.6115 from a high of 0.6153 earlier after a slightly more hawkish RBNZ at the balance.

In the equities space, European stocks are down across the board while S&P 500 futures are also lower by 0.1%. And the more cautious risk mood there is also helping the dollar find a better footing on the week.

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

The USD has been
generally under pressure since the benign US CPI report last week as the
hawkish expectations subsided and the market switched its focus from inflation
back to growth. This triggered a positive risk sentiment which is generally
negative for the greenback and benefited the other major currencies.

The EUR, on the
other hand, has been gaining ground mostly because of the US Dollar softness amid
positive risk sentiment. One thing to watch will be the Eurozone wage growth data
tomorrow as that might shape market’s expectations for rate cuts beyond June.

EURUSD Technical
Analysis – Daily Timeframe

On the daily
chart, we can see that EURUSD rallied into the key 1.09 resistance
following the US CPI release and got stuck in a consolidation ever since. The
market is waiting for a catalyst to push the price in either direction, but for
now the bias remains bullish. A break above the 1.09 handle should see the
buyers taking the pair into the 1.10 handle next.

EURUSD
Technical Analysis – 4 hour Timeframe

On the 4 hour
chart, we can see that we have a good support around the 1.0830 level where we
can find the confluence
of the trendline
and the 38.2% Fibonacci
retracement level. This is where we can expect the buyers to step in with a
defined risk below the trendline to position for a break above the resistance
with a good risk to reward setup.

The sellers, on the other hand, will want to
see the price breaking lower to invalidate the bullish setup and position for a
drop into the 1.0727 support.

EURUSD
Technical Analysis – 1 hour Timeframe

On the 1 hour
chart, we can see more clearly the rangebound price action since the US CPI
rally. We have the support zone around the 1.0830 level and the resistance zone
around the 1.09 level. A breakout on either side should see the momentum
increasing in the direction of the breakout.

It’s unlikely that
we will get a breakout today though as the average
daily range limits are basically right at the support and resistance levels
and we don’t have major economic releases that could trigger a strong move.

Upcoming
Catalysts

Today we have the FOMC Minutes late in the day although it’s
unlikely to be market moving. Tomorrow, we will get the Eurozone negotiated wage
growth for Q1, the Eurozone and US PMIs, and the latest US Jobless Claims
figures.

This article was written by Giuseppe Dellamotta at www.forexlive.com.