September 24, 2021 14:24:37
The dollar is finding a bid today as it reverses its recent losses on more cautious risk sentiment. China Evergrande failed to make a coupon payment due yesterday, so markets are on edge as we go into the weekend.
The other major recent news is the move in bond markets. The widely watched benchmark US 10-year Treasury yield jumped 12 basis points higher on Thursday. This took it through its 200-day moving average and to levels last seen at the start of July.
This is a huge move in bonds and contributed to JPY selling, taking the major through the 100-day SMA. With dollar buyers in action today, prices have continued to move north and are heading towards the August swing high at 110.80.
The weekly close will be important to see if the major can hold up here and stay out of the recent range. The next target above sits at the March high at 110.96/111.00. This should come into view if yields continue to rise. The year-to-date top resides at 111.65. This was the highest level going back to March 2020.
Support at the top of the recent range comes in at 110.44. But it is all about bond yields for this major at the moment. Spiking longer US Treasury yields might also upset stock markets over the medium term. The 1.50% level in the 10-year is worth watching as a key level going forward.
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