The moves point to a further easing of carry trade unwinds as risk sentiment remains stable. USD/JPY in particular is up 0.5% at 147.30 levels now but remains close to the highs of the recent rally from last week:
USD/JPY Daily Chart
This does not suggest that we are about to see a stronger correction after the sharp decline in July. But buyers are trying to regain some momentum in the near term at least. Now, with the slow rise in the session, the price is once again moving above its 200-hour moving average at 147.18. This is the first time in four weeks that the stock has traded above the key level in the near term.
So, this will be one of the things to watch to try to gauge feelings in the pair over the next few sessions.
Additionally, the USD/CHF pair rose by 0.3% to reach 0.8680 and also exceeded the same key near-term level as the USD/JPY pair.
USD/CHF Hourly Chart
This suggests that buyers are back in control of the market in the near term, but it is still early days. Especially since market players will also be watching key US data in the coming days for further evidence.
The euro, pound and Canadian dollar were little changed, unlike other major currencies. However, the Australian and New Zealand dollars recorded slight gains, with the AUD/USD pair up 0.4% to around 0.6600 and the NZD/USD pair up 0.5% to 0.6025 currently.
Elsewhere, S&P 500 futures were up 0.1%, while early gains in European indices have now turned marginal. So it’s not an easy start to the new week.