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After it had found difficulty to get over 1.3678 resisting level, the single retreated again versus the greenback to be traded currently below 1.36 ahead of the release of April industrial productions of France and Italy.

The pair could rebound from 1.35 area twice last week one following the ECB’s easing package last Thursday and the second following the bullish release of US labor report of May which suggest more tightening steps to come by the Fed.

This divergence persisting between these 2 central banks can lead the direction of this pair in the coming period with no sign of a change yet.

XAUUSD is still the most watched instrument since yesterday gaining of the US major equities indexes which rose in its first session this week underpinned by new good economic data could not be ignored to push S&P 500 higher further over 1900 psychological level.

S&P 500 could reach these levels basically on the release of the FOMC’s recent meeting minutes which have shown tries for finding a way to the opposite direction lowering its easing stance further with keeping the reinvestment of maturing assets, after the beginning of raising the interest rate.

The greenback has been underpinning by these minutes and also the US equities with no expectations of beginning of selling soon of the $4.34 trillions of assets in the current Fed’s way of tightening its policy.

The risk aversion continued its possession of the current market sentiment by dovish US industrial production in March has been drown down by 0.6% monthly, while the market was waiting for unchanged monthly figure after rising by 0.7% in march has been revised up to be by 0.9% driving the US treasuries yield down to watch UST 10YR now at 2.49% undermining the demand for the greenback.

USDJPY could not have a place over 102 again following the release of this figure to retreat to its previous supporting level at 101.31, while the Japanese yen has been actually well-supported by the flash release of the Japanese GDP growth in Q1 which rose by 5.9%, while the market was waiting for 4.2% from 0.3% in the fourth quarter of last year.

Despite the return of the risk appetite, The greenback is still holding its recent gains across the broad as the US treasuries yields are still able to keep what it had following Yellen first press conference as the Fed’s Chief which lowered the investors dependence on the Fed’s QE.

The differences which have taken place in the money markets among the bonds yields cannot be ignored until and that’s why the greenback is still able to keep its gains versus the Japanese yen despite the risk aversion wave which overwhelmed the equities market following the Fed’s meeting as you can see that the JGB 10 years yield is still below 0.6% while its US counterpart rose with these new expectations to 2.78% weighing on the USD property as a low cost funding currency versus the Japanese yen.