DXY's weekly momentum has crossed over in deeply oversold territory. This has historically been an indicator of a >3% rally in the dollar in the last 10 years, and is supported by other technical developments as well as broader macro sentiment. Friday’s strong NFP nos too augurs well for a temporary DXY relief rally. We believe we might see a temporary DXY relief rally till 102.70 level which is also the 50DMA on a 5-year chart. It is important to recognize that there have been fundamental drivers to the Dollar’s stabilization in recent weeks; it has not just been a technical or positioning-led move. In particular, there are signs of some policy recalibration from the Trump administration that could alleviate some of the most currency-negative implications. In addition, data so far have generally reaffirmed that the US economy entered this period with solid momentum, as underlying measures of Q1 domestic demand help demonstrate, and the surprisingly resilient ISM report and company capex spending plans suggest that sentiment did not weaken materially over the course of April. Friday’s NFP data might be regarding by many as backward looking but for now it should help DXY regain some lost footing. We prefer waiting for EUR to fall towards 1.1185 levels to initiate fresh longs. In GBP we like to sell on upticks as we see a higher risk of a dovish BOE in it's 8th May meeting. In JPY, we believe the current weakness is a good opportunity to add JPY longs at CMP of 1.4485 for an eventual target of 138 levels by end of Q3CY25. Stop to this view is a weekly close above 1.4985 levels. AUD is bullish only above a daily close above the 200 DMA of .6459. CNH we had recommended selling 7.60 calls of 1-3 month expiry. That trade has worked out well and we continue to believe CNH short term range is 7.14-7.35 levels. CHF has not recovered enough even after a global risk on rally. Hence the scope for a sharp sell off in CHF is our view in short term, hence we like to sell CHF for a target of .86 levels with a stop around .8085 levels, CMP being .8287. CAD remains range bound with any failure on tariff negotiations likely to result in a swift movement towards 140 levels.
