The market mood is better than Friday last week. But this is only a slight pause, as there was no significant escalation in geopolitical developments over the weekend. In FX, changes between dollar pairs leave a lot to be desired:
Movements are less than 20 pips for each pair, with a rather flat vibe also observed for some. Overall, the dollar continues to be in a comfortable position, but further gains are capped for now.
USD/JPY remains a key item to watch as the pair continues to consolidate near the 155.00 mark. The level of the figure is a key threshold to consider as it constitutes a potential trigger for intervention by the BOJ.
If risky trades have to progress further, I see the dollar losing a little more ground. But pretty soon we’ll have some modest data releases to work with in the coming week. And perhaps that could give traders more weight in their call to action.
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