US AM Digest: US Treasury Yield Resistance Keep DXY Buying at Bay

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US Market Snapshot via IG: DJIA +0.5%, NASDAQ 100 +0.5%, S&P 500 +0.5%

USD: Tepid price action for the US Dollar for much of the morning after its recent stellar gains, the key 3% level in the US 10-year treasury yield is holding for now and as such keeping a further rise in the USD at bay. Little in the way of major economic data points, which may suggest that a clean break from the key 3% level may be on hold for now.

EUR: Narrow 40 pip range for the Euro, currently holding 1.2200 after a brief dip through to 1.2180. Uninspiring German data continued with the latest IFO survey this morning, all major components saw a sizeable dip in April, business expectations dropping to its lowest level since August 2016 amid concerns that the German economy is slowing down.

AUD: The Australian saw a somewhat choppy price action in the wake of the latest inflation figures which had been somewhat mixed. Australian CPI fell short of expectations at 1.9% (Exp. 2%) with Q1 CPI falling to 0.4% from 0.6%, however the RBA’s preferred measure of inflation (Trimmed mean) rose ahead of consensus at 1.9% (Exp. 1.8%). Ultimately, not a game changer for the RBA who are expected to keep interest rates on hold for 2018.

DailyFX Economic Calendar: Tuesday, April 24, 2018 – North American Releases

DailyFX Webinar Calendar: Tuesday, April 24, 2018

IG Client Sentiment Index Chart of the Day: AUDUSD

AUDUSD: Data shows 64.4% of traders are net-long with the ratio of traders long to short at 1.81 to 1. The number of traders net-long is 11.4% higher than yesterday and 27.3% higher from last week, while the number of traders net-short is 6.3% higher than yesterday and 25.8% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUDUSD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger AUDUSD-bearish contrarian trading bias.

Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page

Five Things Traders are Reading

  1. DXY Bottoming Effort Takes Step Forward as Three More Hikes Eyed in 2018” by Christopher Vecchio, Senior Currency Strategist
  2. US Dollar Boosted by Bond Yields, EURUSD Likely to Fall Further” by Nick Cawley, Market Analyst

  3. The South African Rand Starting to Reverse Course
    by Shaun Murison, Technical Strategist
  4. Dismal U.S. Consumer Confidence Survey to Curb EUR/USD Weakness” by David Song, Currency Analyst
  5. DAX & CAC Technical Outlook – More Strength Ahead?” by Paul Johnson, Market Analyst

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— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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