It was a flow-driven day to start the new year and the dollar benefited as a result, with USD/JPY holding on above 130.00 on the daily while other dollar pairs also showed some notable technical developments. GBP/USD fell below 1.2000 but hung on to the 23.6 Fib retracement level of its swing higher since September, seen at 1.1953. Meanwhile, EUR/USD is looking to contest its broken trendline resistance at around 1.0535 after a bit of a double-top near 1.0700.
So far today, the aussie is unwinding its losses yesterday against the dollar but remains trapped in a bit of a wedge as seen here. That will be one to watch in the coming days/weeks alongside the other technical plays as noted above.
In the commodities space, gold is continuing to keep higher and is up to $1,846 on the day with the high yesterday falling short of $1,850. The technical momentum continues to side with the precious metal for now but keep an eye on the bond market. Flailing inflation will help to pin yields lower but at the end of the day, broader markets will still defer to central banks on the outlook.
After yesterday's late drop in equities, the S&P 500 chart is one I will continue to highlight in watching closely.
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