The dollar extended this week's Fed-inspired gains on Friday after St.
Louis Federal Reserve President James Bullard bolstered policymakers' hawkish message to markets nL2N2O0136nL2N2O01JU, which sent EUR/USD to a 10-week low.
It took a risk-off response from stocks, which ultimately pushed Treasury yields lower, to temper the dollar move.
EUR/USD fell 0.28%.
After 2-year Treasury yields spiked to their highest in a year, EUR/USD fell to a 1.1847 low on EBS, nearly reaching the 161.8% Fibo projected low off the May 25 to June 4 drop and the 76.4% Fibo of the March-May advance at 1.1842/36.
The low also nearly hit the 1.18335 weekly cloud top, with daily RSIs their mostly oversold since last February.
The dollar index's 92.408 high completed its 161.8% Fibo objective off its May-June base.
A dollar correction to reset overbought studies could offer a good buying opportunity near the 200-day moving average that initially caught EUR/USD's Fed meeting fall Wednesday, and now stands at 1.19958 by Thursday's 1.20065 high.
Sterling fell 0.75% following a bigger-than-forecast retreat in UK retail sales from April's 9.2% m/m surge nL5N2O0105 and with lingering concerns about full UK reopening due to a rise in COVID variant cases.
The pound, which had its worst week since September, marginally pierced the April-June rise's 76.4% Fibo and late April lows at 1.3806/03 with a 1.3795 low.
As with EUR/USD, GBP/USD's fall this week was likely accelerated by net spec longs having to sell.
Sterling is also highly positively correlated to S&Ps, which were having their worst week since February and probed often-pivotal 55-day moving average support ahead of the close.
USD/JPY fell 0.1% after an early low at 109.945 that was supported by 110 options interest ahead of Wednesday's 109.80 low.
The bullish initial reaction to Bullard sparked a spike to the 110.485 high, a 61.8% Fibo of the fall from Wednesday's 110.825 high to Friday's low and by popular 110.50 options expiries next week.
Friday's BOJ meeting left in place the negative policy target and zero 10-year target nL2N2NZ33G, leaving Treasury yields swings as the main factor in Treasury-JGB yield spreads.
Those spreads were thrown into disarray by the this week's pricing in of Fed tapering and eventual tightening that flattened the yield curve, allowing USD/JPY to rise despite 10-year yield spreads falling to their lowest since early March.
That normally USD/JPY bearish event was offset by 5-year yield spreads surging toward April's pandemic highs.
Aussie fell 0.65%, and hit 0.7479, its lowest since December, getting below the 50% Fibo of the November-February rise at 0.74985, but not the 50-week moving average at 0.7475.
Bitcoin and ether fell to their lowest in a week and since May, respectively.
Other than Fed speakers and U.S. existing home sales on Tuesday, there's little economic event risk until global PMIs for June are released on Wednesday.
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