FX Morning Colour: Dollar mixed, but DXY holding above 90.000 pre-NFP

Usd/majors are broadly split down the middle as the safer-havens underperform on latest US-NK developments and further signs that President Trump is willing to approach import tariffs on a country by country basis. Usd/Jpy has now broken free from its recent 106.00 anchor to the upside, above 106.50 and through the 20 DMA around 106.75-80, but could be contained by hefty option expiries within a new 106.50-107.00 range (1.2 bn and 3.8 bn respectively), with the upper end not just more alluring due to the size of interest at the strike, but also perhaps compelling if US jobs data is strong (wages especially). Usd/Chf is testing 0.9500, while Eur/Usd is trading either side of the 1.2300 handle and remaining lower after Thursday’s sharp reversal from initial post-ECB/Draghi presser peaks. In terms of tech analysis, 1.2334 seems to be capping the upside (21 DMA), while support is seen down at 1.2245 and there is also big expiry interest in close proximity with 1.8 bn running off at 1.2300 and 2.3 bn at 1.2350. The Loonie is amongst the G10 outperformers and back below 1.2900 vs the Greenback after Canada (and Mexico) got an indefinite exemption from steel and aluminium taxes pending NAFTA negotiations. However, today’s employment report offers plenty of scope for independent impetus and there are some decent option expiries that could come into play around 1.2815-25 (1.1 bn) and 1.3000 (1.6 bn). The Aud and Nzd are off recent lows vs their US counterpart amidst the latest upturn in broad risk sentiment around 0.7800 and 0.7275, while Cable is holding just above 1.3800 and 1.3780 short term chart support despite a raft of poor UK data, and in particular a collapse in construction output. Elsewhere, Eur/Nok dropped (to sub-9.600) on stronger than expected Norwegian inflation data, with headline CPI above the new 2% target level just ahead of next week’s policy meeting. Looking at the Dollar Index, yesterday’s close above the 21 DMA at 89.820 bodes well for further recovery gains and a breach of the topside from the current circa 90.100-300 range.