USD flows: Asia risk recovers, but USD not cancelled yet

Continuation of Monday’s tone with the stronger risk recovery underscored by the extent of the 8% rebound in the Kospi overnight, taking back the majority of post-Friday’s drop. ‘IPO fever’ seemingly not harming either as players look for proxy buys into SpaceX and as OpenAI files for US IPO following Anthropic. Still, US S&P future while holding off the first support test from Friday hasn’t done enough to be shifting its corrective setup yet.

Crude also off a further 1% to be drifting of to the lower side of the recent band on the back of Israel and Iran saying they are halting strikes for now.  China data was also stronger than expected on both exports and imports, showing resilience. Data also underscored the extent to which China stock management is helping to cap oil for now, as its oil imports dropped to 8-year low.

Dollar leaking back out gradually as a result of all that, is still not quite clearing the important near-term hurdles. .7080/.7100 May low and congestion area. Remains key bounce resistance on AUD/USD for instance above which needed to take the pressure off. 1.1550/75 (to the 1.16 break max) are the limits for any backfilling for EUR/USD before it neutralises the overall negative slant.