Forex

AUD/USD slumps towards 70c as surging US yields and a stronger dollar overshadow Australian jobs data and the RBA outlook.

Over recent trading sessions, the Mexican peso has started to show signs of losing strength against the U.S. dollar. This can be seen in the performance of USD/MXN, which has gained more than 1.7% over the last three sessions, highlighting the dollar's renewed strength against the peso.

Euro has fallen seven of the past nine sessions, with stretched momentum raising the stakes as EUR/USD closes in on a major inflection zone.

The US dollar continued to press higher deep into the European session, supported by the slump in the bond markets as yields broke out across the curve. Following the recent hawkish Fed rate hike, yield spreads between the US and the rest of the world has continually increased, and that motion continued today, helped in part by some forecast-beating US macro data and hawkish Fed commentary.

AUD/USD remains under pressure after breaking key trend support, with the latest decline putting the focus on the next major downside pivot.

The US dollar has extended its gains this morning, even if oil prices finished lower for the fifth consecutive day yesterday. Oil prices have bounced back in this first half of today’s session, causing a bit of pressure on currencies that rely on energy imports such as the euro, pound, Swiss franc, and Japanese yen. But it was the dollar that was exerting the most pressure, amid hawkish FedSpeak. Meanwhile, European indices and precious metals were also under a bit of pressure amid the strength of the dollar.

EUR/AUD and GBP/AUD are coiling near support, with recent correlations suggesting the Aussie’s strength is being driven more by rates, risk and metals than energy.

Sterling has slipped below its 200-day moving average as downside momentum carries GBP/USD toward another major technical support zone.

Donald Trump’s speech at the UN seems to have poured cold waters on any hopes of a deal. Crude oil, the US dollar and bond yields all bounced back from their lows, causing fresh pressure on foreign currencies, European indices and to a lesser degree precious metals.

NZD/USD has become unusually sensitive to relative front-end rates, with the US two-year yield advantage now near historically extreme levels.

A new trading week is underway, and the Canadian dollar continues to show signs of weakening momentum. This can be seen in recent USD/CAD price action, with the pair gaining nearly 0.7% over the last four trading sessions.

Sr. Technical Strategist Michael Boutros highlights the levels that matter on the DXY, GBP/USD and Bitcoin charts this week.