There’s not much in terms of action so far in European morning trade, with the market moves so far looking rather tentative at best. 10-year Treasury yields are holding steady at around 4.04% after the drop yesterday and that is keeping traders on edge today:

The limiting factor so far looks to be the 200-day moving average (blue line) but also the 23.6 Fib retracement level from the swing lower since the end of October to December. That is the first key hurdle for bond sellers to break through in order to validate further the recent bounce in yields to start the new year.

As yields keep steadier today, the dollar is also finding itself in a similar position. USD/JPY is down slightly by 0.2% to 143.90 but it has been weaving in and around the 144.00 mark so far in European trading. Besides that, EUR/USD is flat at 1.0945 and GBP/USD down 0.1% to 1.2735.

Looking at the commodity currencies, AUD/USD is down 0.2% to 0.6700 despite a stronger Australian retail sales report here. However, the data comes with a big caveat amid a boost from the Black Friday sales.

In the equities space, stocks are also not really following through on the gains yesterday – at least not yet. S&P 500 futures are down 0.3% and European indices are also slightly lower so far on the day. That isn’t leaving much for risk trades to work with on the session as such.

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