Regardless of the court decisions and even if Donald Trump's plans are thwarted, he still has a range of tools at his disposal to put pressure on his trading partners. The prevailing uncertainty is limiting visibility and weighing mechanically on the US dollar, regardless of its apparent attractiveness due to high interest rates.

In this respect, the spread between US and Japanese 10-year yields has broken out of the downward trend that had prevailed since 2020. Over this period, the correlation with the USD/JPY was particularly striking. We will therefore be watching closely for a potential reversal, which would be all the more significant if the BoJ allows its interest rates to drift (see the article on interest rates available HERE).

Source: Bloomberg

Technically, the EUR/USD successfully tested its support at 1.1245 before moving back towards its recent highs at 1.1575. The maximum upside potential is 1.1675, at which level we anticipate consolidation. The cable is still holding above its 55-day moving average, currently providing support at 1.3270, with a target range of 1.3785 to 1.3825 and a maximum of 1.4245, corresponding to the 2021 highs. No significant change on the USD/CHF and USD/JPY, both in a downward trend towards 0.8040 for the former and 139.88 for the latter.

Among commodity-linked currencies, the USD/CAD is moving steadily towards 1.3620, ideally ahead of 1.3416/3345, corresponding to the lows of September 2024. The Aussie continues to trade in a horizontal consolidation range between 0.6360 and 0.6510, which it will need to break out of to resume its upward momentum towards 0.6700/25. At the same time, we will monitor resistance at 0.6030 on the kiwi to confirm a reverse head-and-shoulders pattern, which could potentially reach 0.6200.