The greenback was marginally higher versus the yen at 109.53, following its largest percentage gain in almost a month during Friday’s U.S. session.
“The non-farm payroll was a strong number and is supporting the dollar. A dovish Fed had hit the dollar/yen but rising stocks and solid U.S. data have led to this bounce back,” said Nick Twidale, chief operating officer at Rakuten Securities.
· The benchmark 10-year U.S. Treasury yield was 2.69 percent, rebounding from a four-week low of 2.619 percent earlier last week. Rising U.S. yields are most likely to support the dollar in the near term.
· In broader moves, currency markets stayed in tight ranges in early Asian trade, with euro trading flat at $1.1455.
The dollar index, a gauge of its value versus six major peers, was steady at 95.58.
· GBP/USD Technical Analysis
GBP/USD is trading continues enjoying upside Momentum, which has not diminished with the recent slide. Moreover, the Relative Strength Index is outside the overbought territory, below 70, implying more gains are possible.
Cable is trading below a downtrend resistance line that accompanies it in the past few days but most indicators are positive.
1.3095 worked as a line in both directions in recent days. More importantly, 1.3150 prevented the pair from extending its gains after the Fed. 1.3220 is the cycle high. Further above, 1.3275 and 1.3300 date back to the autumn.
1.3040 is the fresh low and also capped cable in November. 1.3000 is a critical round number and also served as resistance in the middle of the month. 1.2925 was a temporary high on the way up and 1.2830provided support during the climb in mid-January.
· USD/JPY benefited from the jump in US yields on Friday following the NFP report that sent the pair rallying from 108.90 to almost 109.60 after the jobs data.
The pair returned to its comfort zone previous to the FOMC's dovish announcement, above the 109.05 Fibonacci level, the 61.8% retracement of its latest daily slump. In the daily chart, the 100 DMA extends its decline above the 200 DMA, nearing the larger one, both around 111.50, maintaining the longer-term perspective skewed to the downside. Technical indicators in the mentioned chart head marginally higher within neutral levels, falling short of confirming additional gains ahead.
Support levels: 109.05 108.65 108.30
Resistance levels: 109.60 110.00 110.40
· Oil prices rose to their highest so far this year on Monday as OPEC-led supply cuts and U.S. sanctions against Venezuela’s petroleum industry tightened markets.
International Brent crude oil futures climbed to a 2019 high of $63.37 per barrel around 0800 GMT after already rising by 3 percent the previous session.
U.S. West Texas Intermediate (WTI) futures hit a 2019 high of $55.68 per barrel around the same after already gaining 2.73 percent in the last session.
“While Venezuela’s output reportedly rose last month, fresh U.S. sanctions on the country could see 0.5 to 1 percent of global supply curtailed,” Vivek Dhar, commodities analyst for Commonwealth Bank of Australia, said in a note on Monday.
Reference: Reuters, CNBC, Daily FX
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