Forex today: Dollar longs continue to get squeezed and commodity / high-beta complex benefits

Forex today was somewhat mixed, but risk on kept the dollar in check and enabled the commodity complex and cable to climb higher.

Analysts at ANZ explained that markets were calmer overnight, following last week’s indication that the Fed is on hold for the time being:

"At the time of writing, the S&P 500 was up 1.1% and the yield on US 10-year Treasuries was a touch higher at 2.68%. European bourses underperformed. The DAX was off 0.2%, and the CAC 40 and FTSE 100 were both off 0.4%. Oil firmed with WTI up 2.8%. The better tone in markets and production cutbacks were cited as reasons for better performance over the past week. Gold was up 0.1%."

Currency action

The greenback was generally lower as long dollar gets squeezed as risk appetite continues to recover. The DXY dropped to test the January 1st lows of around the 95.60s from space on the 96 handle for the lowest close since October. The euro benefitted on the dollar's decline and had a look in at recent tops. The pair reached as high as 1.1483, 8 pips higher than the low un early European markets. Cable was outperforming again, with a last minute burst in early Asia on the back of a sterling favourable Brexit headline in the Telegraph, sending it to fresh highs up at 1.2790 with the sentiment of pushing back Article 50. However, in thin liquidity and being Cable a coin toss ahead of next week’s Brexit vote, there was a lack of anyone wishing to take the other side. USD/JPY drifted higher as markets come out of the yen and search out yields and carry. USD/JPY hit a high in the 108.70s. High-beta FX enjoyed the rise on Wall Street and commodity prices that lifted the CAD again to re-test the December bull breakout at 1.3300. AUD/USD was also drifting higher along with the Kiwi. AUD ended around 0.7150 and the bird 0.6750.

Key notes from US session

Wall Street's benchmarks adding to the daily correction towards critical technical levels

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