USD strength is back in full force today, but this time the yen is outperforming it due to falling indices. This implies the yen remains the ultimate safe-haven currency, even gaining versus the Swiss franc, which flexed its muscles over the past 2 weeks due to escalating political uncertainty. 1.1700-1.1720 remain the key level for EUR/USD as far as the daily and weekly close.
Test
These levels face a hard test ahead of today's release of the Fed minutes from the May 2 decision. Recall that USD had a temporary selloff (mainly against gold) following the Fed announcement due to a phrase in the Fed statement indicating the willingness to let inflation rise above target. But the EM selloff changed everything, feeding the USD into a carry-trade unwinding frenzy. So keep an eye for any more details on the Fed's symmetrical target.
As for the realities of the market, our Premium trade shorting DOW30 last week was stopped out at 25050. The market extended to 25080 before tumbling 200 pts. in the futures. Well done to those who stuck with the trade.