There aren’t any major expiry levels that are likely to be of much influence on the day, with the full list seen below.
The closest and most relevant one is for EUR/USD at the 1.1100 level but the strike is some 40 pips away from the spot price. Barring any major pullbcak in the dollar, the expiries here are not likely to feature given that it is still a bit of a distance away. But if we do see the dollar ease up a little in the session ahead, the expiries here could then act as a bit of a magnet or attraction point amid two-way hedging flows ahead of the cut. Just something to keep in mind, just in case.
Besides that, the main focus among major currencies today will be on USD/JPY. The currency pair is flirting with the 160.00 mark again and is now inviting verbal intervention by Japanese authorities. The key psychological level is a notable one as Tokyo has previously drawn a line in the sand here with previous intervention efforts, as evident when they acted back in late April and early May.
As such, that is now inviting a lot of pushing and pulling as traders are playing a game of chicken with Japanese authorities. The dollar has the momentum behind it but intervention risks are still limiting gains for now.
Other than that, dollar sentiment will continue to be a key driver to watch out for in ending the week. The bond market selloff is returning and that is underpinning Treasury yields once more, particularly at the long-end of the curve. So, that is also helping to provide the dollar with a modest tailwind this week. Do keep an eye out here in case this continues to run ahead of US trading, with US PPI data also in focus later in the day.
For more information on how to use this data, you may refer to this post here and/or refer to the Q&A below.
This article was written by Justin Low at investinglive.com.