At the start of the week, month-end flows made it tough to read into the moves across markets. Bonds were bid in Europe before curiously falling in US trading but with that out of the way alongside Fed chair Powell's less hawkish remarks, it was enough to push bonds higher (yields lower) over the past few sessions.
The size of the move is rather substantial with 2-year Treasury yields dropping further now to 4.20% - its lowest in two months. Adam posted some food for thought yesterday here.
Meanwhile, we've seen 10-year Treasury yields slide towards 3.50% and that is nearing its 100-day moving average, seen at 3.48%:
In other words, there are big technical levels coming into play now for the bond market. If the rally continues to pick up after the US jobs report today, that will surely spell further trouble for the dollar - especially if 10-year yields crack below the key level above.
In turn, with USD/JPY already testing waters below its 200-day moving average as pointed out here, it could be a quick trip to 130.00 next if things align with the bond market.