FOREX: Dovish Leans Post FOMC Further Weigh on Greenback, NFP in Focus

* With the May FOMC outcome leaning dovish, a further decline for US yields has

  moderately weighed on the USD index on Thursday. G10 gains have been
  concentrated in CHF and JPY, with similar advances seen for Antipodean FX and
  the Canadian dollar.

* Naturally, the focus was once again on the Japanese yen, following the

  suspected intervention late Wednesday, which likely takes the BOJ's net USD
  selling to roughly $60 billion, a similar amount to that deployed in 2022 to
  support the local currency. USDJPY recovered back to 156.28 in APAC trade,
  however, has since consistently traded with a downward bias. The pair is now
  down 0.5% on the session, and sits just 75 pips from the 153.00 lows.

* This week's volatile session highlights the start of a possible corrective

  cycle and yesterday's sharp sell-off reinforces this theme. The pair has
  traded through support at the 20-day EMA - at 154.58 - exposing the 50-day
  EMA at 152.39, a key support. Note that trendline support drawn from the Dec
  28 low, lies at 151.05.

* The CHF remains one of the best performers, reversing a small part of recent

  weakness as data this morning confirmed the stickiness of CPI, which came in
  well ahead of expectations (1.4% vs. Exp. 1.1% Y/Y). As a result, USD/CHF has
  reversed further below 0.92 and might be lining up a test of next support at
  the 0.9088 level.

* EURUSD and GBPUSD remain close to unchanged and have been relatively

  insulated to the broader greenback moves as market participants may be
  sitting on the sidelines ahead of the key US employment report scheduled on
  Friday.

* Few analysts look for an upside surprise for the u/e rate, but we wouldn't

  rule one out with risk of a dovish reaction. At 3.83% in March, it doesn't
  take much to move closer to the FOMC's 4.0% end-2024 forecast. Following the

data, US ISM Services PMI will round off the week's calendar.