Technical Analysis

Dollar catches a bid on the session

The greenback and yen are moving higher in European morning trade

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The dollar is gaining across the board, with cable slumping to fresh lows on the day of 1.2424 with the euro also slumping to fresh session lows of 1.0859 after the German court ruling on the ECB QE case earlier.

Notably, AUD/USD and NZD/USD have also pared gains against the dollar as European stocks pare gains following the court case ruling.

The reaction is more notable in European bonds as there is a selloff in German and Italian debt and that is spilling over to the equities space, dragging stocks lower.

In turn, we are seeing the dollar and the yen find bids on the session.

For cable, price is now threatening a break below its 200-hour MA (blue line) and that will see near-term price action turn more bearish once again.

Support around 1.2400-05 remains key for now with the 61.8 retracement level sitting nearby @ 1.2399 alongside the 29 April low @ 1.2389.

Those will be key downside levels to watch in the session ahead in case risk trades capitulate further and underpin the likes of the dollar and yen even more.

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