Asian Open

The US dollar snapped its 3-day winning streak and formed a bearish outside day, helping gold reach our upside target. EUR/USD and AUD/USD are now eyeing a move towards key resistance levels.

The US dollar may have risen for a third day, yet bulls lack the conviction that bears displayed last week. And that suggests this bounce could be corrective.

The Australian dollar handed back all of its pre-RBA gains, which was trying to notch up a fifth consecutive bullish day on anticipation of a more hawkish RBA. Yet the statement was not overly hawkish and Governor Bullock said the RBA “believe rates are at the right level to get inflation back to target”. Inflation was revised higher to show inflation falling back to target at a slower pace and the RBA remain “vigilant” to upside risks.

Both gold and GBP/JPY are showing signs of stability around key support levels to suggest they could extend their bounce. But with AUD/USD rising for four days on anticipation of a hawkish RBA, whether AUD/USD can extend its rally beyond resistance is up for question.

It was the Japanese yen which stole the show after Jerome Powell’s press conference, with USD/JPY falling over 450 pips on another suspected BOJ intervention.

A surprise rise in US wage pressures weighed on sentiment on the eve of the Fed meeting, sending the US dollar broadly higher, Wall Street lower as AUD/USD suffered its second worst day of the year.

Despite the MOF's best attempts, USD/JPY is holding above 155 - a level traders are clearly watching. AUD/USD shows the potential to extend gains into 66c, but having risen for 6 days already then perhaps the upside potential it limited.

The US 2-year bond yield remains support, which is capping the yield at 5% and weighed on the US dollar. And that helped AUD/USD rise for a second day ahead of a key AU CPI report.

Bond yields and the US dollar surged after the latest US inflation report bought serious doubt over a June Fed cut, dragging global indices lower which sets the stage for the ASX 200 cash market to suffer today.

1-day implied volatility levels for USD/JPY, EUR/USD and NZD/USD have blown out ahead of today’s key events, which includes comments from BOJ’s governor, and RBNZ cash rate decision and the US inflation report.

Momentum is turning higher for AUD/USD during a month that tends to promote positive returns, and gold bulls continue to dominate price action as it reaches yet another record high.

The US dollar retraced for a third day, but with NFP stats favouring a 'beat' then we're on guard for a dollar bounce.

US dollar bears wasted no time to short the buck after a soft ISM services report, to mark its second worst day this year - in a month usually associated with losses.

AUD/JPY and the ASX 200 look set to diverge with the former strongly hinting at a swing low and the latter failing to hold above 7900 on Tuesday.

A stronger-than-expected ISM manufacturing report sent the US yield curve and the dollar higher, sending USD/JPY within reach of 152 and AUD/USD lower.

With geopolitical tensions on the rise and Russia announcing production cuts as infrastructure continues to face attacks, the path of least resistance for WTI crude oil appears to be higher.

The market appears to be doing the BOJ's work by refusing to test 152, which paints a bearish bias over the near term for USD/JPY.