Asian stock markets stabilized somewhat after China removed its new stock market circuit breaker that was introduced on Monday. Risk appetite improved in the FX market as well, with AUD and NZD being the two best performing currencies overnight, while the Japanese Yen, considered a safe haven, declined.
USD/JPY started the new trading day around 117.60 and rallied after the Tokyo open, as risk appetite improved. The pair rallied to a high of 118.60 eventually, where it ran out of momentum and fell back to 118.30. Key resistance is now seen at 118.70/80 and should it break above that, it would pave the way for a 119.20 test.
EUR/USD fell overnight, after an impressive rally yesterday. The Euro benefited from the decline in European equity markets, but gave up some of it gains after sentiment improved. The pair dropped from 1.0940 to a low of 1.0875 in Asia.
GBP/USD also recovered somewhat after almost reaching 1.45 yesterday. It rallied to 1.4645 overnight, but techs remain bearish and further gains may remain limited.
The focus today will be on US employment data. The market is expecting a 200k print for the NFP, while the unemployment rate is anticipated to remain unchanged at 5.0 %.
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