The ups and downs in the currency markets continue

The US session is seeing a move back lower in the US dollar after gains in the European session. The S&P manufacturing flash index came in weaker than expected 48.5 versus 50.0 although the services index was higher than expectations. New home sales were also better than expectations but the Richmond Fed composite and manufacturing indices were lower. The US yields are off their high levels. Stocks are trading lower.

Comments from GOP leaders are negative this morning as they jockey for position ahead of their discussions at 11 AM ET. The tone seemed to deteriorate overnight from the GOP's point of view.

Looking at some of the major currency pairs:

• EURUSD is trading back toward the 1.0800 level. The high price in the US session just reach 1.0795. The current price is trading at 1.0789. The low price in the EURUSD extended to 1.0763 which was about 4 pips short of the low from last week's trading at 1.0759. There is a key swing area support at 1.07509 (see video from this morning) that if broken would increase the bearish bias. That was not meant to be on the move lower today. The 100-day moving averages at 1.08115. That will be another key upside target now.

• USDJPY: The USDJPY move to a new high for the year and the highest level since November 2022 at 138.904. The move to the upside took out the high from last week at 138.73. Our momentum cannot be sustained, and the price has moved back to the downside. The 100-hour moving average comes in at 138.115 and that is the next target support level. The low price just reached 138.28 but has seen a bounce back up to 138.54 currently. A move below the 100-hour moving average is needed to give sellers more confidence. Yesterday the price moved toward the moving average but found early buyers against that level (see morning video). On the top side, the high from last week at 138.73 is the next target to get to and through followed by the high for the day at 138.904.

• GBPUSD: The GBPUSD took out the lows from last week and traded to the lowest level since April 21. The low price reached 1.23723 in the Monday morning session. However, the price over the last 2 hours has seen a sharp rebound back to the upside reaching a high of 1.24336. In the process, the price is getting closer to its falling 100-hour moving average of 1.24387, and a swing area between 1.2435 and 1.2445. Of note is that the price over the last 6 or so days has been able to get above the 100-hour moving average (see blue line in the chart below), but on each break, momentum has stalled and also at lower highs. So there are some attempts to tilt the bias more to the upside, but also the reluctance to extend too far. The price is not traded above its 200-hour moving average currently at 1.2469 since May 11. Getting above both the 100 and 200-hour moving averages will be needed to increase the bullish bias.