The US Dollar is mixed at the start of the week, with EURUSD and GBPUSD moving higher while USDJPY is also rising. In today’s video, I’ll take a look at the technical picture driving the major pairs.
spoiler ALERT: EURUSD is stuck between its 100-hour and 200-hour moving averages, keeping the pair in a more neutral trading stance as buyers and sellers fight for short-term control.
USDJPY remains above both the 100-hour moving average at 161.71 and the 40-year key high at 161.95. The trading range is getting tighter and tighter, preparing for a possible breakout. Importantly, sellers had an opportunity on Friday when the pair briefly broke below the 100-hour moving average, but they could not sustain the declining momentum.
Meanwhile, GBPUSD buyers are taking the US currency above the 200 hourly moving average at 1.3225 to start the US session. Reaching and holding above that level would tilt the bias more strongly to the upside and traders should target 1.3263, followed by the 50% retracement level and a prior swing low near 1.3300.
US stocks are sharply higher. Over the weekend, South Korea announced a major initiative to boost investment in semiconductors, artificial intelligence and technology infrastructure. The program aims to expand semiconductor capacity, AI data centers and advanced packaging, supporting companies such as Samsung and SK Hynix while strengthening South Korea’s important role in the global AI memory supply chain.
The positive technical backdrop is helping equities gain momentum, with the Nasdaq up 375 points, the S&P 500 up 70 points and the Dow Jones Industrial Average up 325 points.
In the US debt market, the yield curve is flattening as short-term yields move higher while long-term yields are mixed. The 2-year yield is up 1.0 basis points at 4.10%, the 10-year yield is 2.4 basis points higher, while the 30-year yield is down 0.6 basis points.
There were also renewed tensions in the Middle East over the weekend after Iran was blamed for an attack on a commercial cargo ship in the Strait of Hormuz. The United States launched limited retaliatory strikes against Iranian military targets near the strait, including drones and maritime-related facilities. The exchange briefly rekindled fears that the fragile truce could break down and disrupt shipping through the Strait of Hormuz – the world’s most important energy chokepoint. Shipping traffic reportedly declined sharply as Iran re-established control over ship movements in the area.
Despite military exchanges, both sides appeared to be withdrawing from the wider confrontation by the end of the weekend. US officials said that while Washington and Tehran have agreed to stop further attacks and continue negotiations, freedom of navigation through the strait remains a major issue. This helped limit the decline in the market, but the situation remains extremely delicate. The main thing is that diplomacy is still alive, but the attack on the cargo ship and the US retaliation served as a reminder of how quickly the region can shift from talks back to military action.
In other markets, crude oil is up by about $ 0.60 at $ 69.80 per barrel. Gold is down $38, or 0.92%, at $4,051, while silver is down $0.87, or 1.5%, at $58.24. Bitcoin is back above the $60,000 level after falling to a low of $58,800 early in the session and is currently trading around $60,600.
