EURUSD tries to post a hammer

• EURUSD tries to post a hammer

• USDJPY breakout fails to hold

• AUDUSD rekindles its ambitions

See FX Board comments for each individual pair. A couple of highlights of the day's action are in the chart descriptions below. One of the chief culprits of this USD weakness may be weak risk appetite, as a popular macro trade in light of European Central Bank easing has been to be long European equities with the currency exposure (EURUSD) hedged. A day like today sees both sides of that trade going very wrong, thus perhaps a major contributor to EURUSD failing to sell off despite a quite strong US ISM non-manufacturing survey release late today that saw a reasonable pickup in Fed hike expectations out the curve to the highest level in over a month.

EURUSD

EURUSD posting an attempt at a hammer today, though we will have to see Friday's payrolls and pay close attention to risk appetite. The first minor resistance comes in at 1.1175/1.1200 ahead of the major 1.1290 top, while the clear support area is the 1.1050/00 level to the downside.

USDJPY

Treacherous USDJPY broke higher intraday, but that break failed to hold as the USD was under broad pressure and despite a generally weak JPY today. This keeps the outlook in limbo, though one wonders why we should expect anything but upside if we see an unambiguously strong US jobs report on Friday.

AUDUSD

AUDUSD got ambitious again after the Reserve Bank of Australia raised its guidance to a more neutral tone relative to the market's apparently over-dovish expectations and despite the actual RBA rate cut. If the USD remains under pressure from here – particularly after Friday's employment report, we risk another squeeze wave toward the 200-day moving average. Otherwise, bears will want to see strong US numbers and this rally reversed back below 0.7800 before regaining any confidence in the downside view.

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