Dollar holds slightly firmer to start the session

The dollar is nudging a little higher across the board now as bond yields are also on the move to start European trading. 2-year yields in the UK have surged higher after the highest inflation in 40 years, moving up to 2.36% - its highest since 2008. That is prompting a push elsewhere in European and US yields as well. But in the major currencies space, it is the dollar that remains solid this week with USD/JPY seen pushing up by 0.4% to 134.80 on the day. That said, the pair remains confined by resistance at 135.00 and support from its 100-day moving average at 131.66 currently. The technical predicament was outlined yesterday here already. Meanwhile, EUR/USD is seen down around 0.2% to 1.0150 but downside momentum is still limited closer to 1.0100. As for GBP/USD, it has backed away from a high of 1.2140 from the UK CPI data earlier to 1.2080-90 levels now: The rejection at the key hourly moving average keeps sellers in near-term control but any major downside momentum remains limited closer to 1.2000 for the time being. Elsewhere, USD/CAD is up 0.2% to 1.2873 while AUD/USD is starting to dip back under 0.7000 as sellers look to extend the recent decline in an attempt to target the 61.8 Fib retracement level at 0.6962: Looking ahead today, US retail sales data and the FOMC meeting minutes will be key risk events to be mindful about as they may shake up dollar sentiment for the remainder of the week. This article was written by Justin Low at www.forexlive.com.
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