The Fed raised rates 0.25% to 5.25% (as expected), but employment data continues to surprise. The U.S. economy added 253K non-farm, and the rate fell to 3.4%. The dollar attempted to rally after the Fed but could not sustain momentum and is now near the recent lows from the last several months. Last week we spoke about the “gap” between 103.65 and 103.30 which keeps us believing there may be a short-term rally to close that area. The overall trend is for a lower dollar. Below the support area of 100.90, the target is 95.90. That is a 5% move from the current level.

EUR (1.1035): The single-currency touched 1.1076 last week before falling back to 1.1000 and ending the week in the middle of that range. The 1.1076 is a crucial resistance level for the euro. Three times in the last two weeks, the currency tried and failed to challenge 1.1100. The support levels are 1.1000 and 1.0950. Below 1.0950, the next target is 1.0850.

GBP (1.2640): Last week’s high was 1.2652, and the market has already tested that area to begin the week. The pound sterling has been holding these highs, which keeps us bullish on the GBP. The target is 1.2850. Strong trendline resistance at 1.3000 should cap a more significant rally for the moment.

JPY (134.85): USD/JPY was volatile last week, falling from a high of 137.77 to a low of 133.50. The weakness in global equity markets caused some investors to liquidate their short yen positions. The yen has become very sensitive to the equity markets; as a result, volatility will remain. Overall, the U.S. dollar is under pressure. Keeping a long yen position is the best way to manage the currency pair. Trendline support at 132.90 is the last central support area before it trades to 125.00.

CAD (1.3370): Oil prices fell to $68/bbl, which supported USD/CAD to its high level of 1.3640. Overall, dollar selling pushed the pair back to the current 1.3370. Oil prices are back to $71.bbl. Support for the pair is at 1.3300 (trendline) and then 1.3260. The target for this next move is 1.2650.

MXN (17.7600): After six years, USD/MXN has moved below long-term support. This should now see the currency at 16.55. Resistance is at 18.0000. Opportunities to buy pesos / sell USDs in the forward market remain. Any rally in the spot will be met with dollar sellers.

CNY (6.9200): The chatter between the U.S. and China continues while the PBOC tightly manages their currency. The range in 2023 has been 7.0000 to 6.7000. No reason to believe that the pair will move outside those levels. Managing Chinese expenditures with forward contracts in CNH will lock in the spot near 7.0000, which is an excellent level to target.