USD Jolted Upwards, EUR/JPY Below 200-DMA

The euro was soft Tuesday as yield differentials continue to weigh but the story was a break of several technical levels. On the day NZD was the top performer ahead of tomorrow's central bank decision while EUR lagged. Japanese business sentiment is due later.

Rising Treasury yields helped to underpin the US dollar as 10-year yields rose to 2.64%. Dollar buying accelerated after April JOLTS surged to a seven-year high of 4455K compared to 4050K expected. The jump in job ads will embolden the Fed bulls and helps to confirm the positive pace of the labor market.

Technicals were in focus as the euro continued to give back the post-ECB gains. The major development was in EUR/JPY as it closed below the 200-day moving average for the first time since late 2012. The pair remains above the late May low of 137.98 but the downside is coming into focus.

One headline that weighed on the euro was the ECB's Mersch saying several banks will need considerable write offs.

A similar technical break came in USD/CHF as I closed above the 200-dma for the first time this year. Ashraf writes more about this pair in the Premium Section.

Keep a close eye on WTI crude oil in the day ahead as it flirts with the $105 zone. That area has capped crude twice this year and inventory numbers are due.

Economic data in the hours ahead is generally second-tier but a spot to watch is the Japanese quarterly business sentiment index at 2350 GMT. The BSI large manufacturers index was 12.5 in Q1. At the same time the Corporate Goods Price Index is due and expected up 0.1% in May.