Today’s focus turns to the AUD, EUR, USD & US 10YT

The USD Index rose to 93.46, its highest since December, as data showing a pickup in U.S. consumer spending exerted fresh selling pressure on U.S. government bonds and sent the yield on the 10-year Treasury note to its highest level since July 2011.

The resurgent tone for the USD is largely due to, number one, the move higher in Treasury bond yields across the curve and number two, the relatively solid data retail sales.

The benchmark government yield US10YT, reached a high of 3.095%, blowing through the key psychological level of 3 percent it hit in late April.

Softer-than-expected economic news from the Eurozone and Britain also helped the dollar.

It plays into the narrative, that the U.S. economy is outpacing growth in most of the rest of the industrialized world and that the Fed will likely far outpace most of the major central banks in policy normalization.

So right at this point, it pays to keep a close track of the US Treasury Bond yields. If you have Reuters you’ll have access but if you don’t then I’d advise following TradingViews updates.

This is where the direction for the USD is coming from, so pay attention!

So trading should be a little easier right now. We have clear USD direction. So the key is to ‘overlay’ the upcoming data on top of that direction.

If it’s with the current direction, then we possibly have an easy trade. If it’s against it, well then it’s a little tougher.

Wait for the data and line up the pairs that fall in with current momentum, that’s the key right now!

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

USDJPY is back on the move, so that brings all the JPY crosses back into play.

But the major focus will be the Australian Wage Price Index. It’s a big inflation number, not unlike US & UK Average Earnings data. This data is rated highly by the bankers, so it’s an important release for us!

The AUDUSD & AUD Crosses will be the go to.

European Session

The EURUSD is sliding lower again and for good reason, another round of weak German & Eurozone data. We have the final CPI numbers for Germany & the Eurozone today.

there usually isn’t a lot of variance in the Final numbers, but still, with the way Euro is moving, it’s worth watching.

No UK data today.

North American Session

It’s good really good timing for the US Housing & Industrial Production numbers, fresh on the heels of the US retail sales data.

The USD should respond to the data, but most important watch the US treasury yields and see how they respond to the data.

In simple terms, if the US data is strong, then the US treasuries will continue to rally and the USD will rally also.

If the data is weak then we may see a reversal of yesterday’s move.

It’s going to be exciting either way!

Technical Set Up – What’s Happening with the Majors

Check our Daily Analysis for detailed analysis of the Major currency pairs.

Today’s Fundamental Drivers

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance with your daily preparation.

Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..