Asian Session Summary

The dollar drifted lower through the Asian session, with DXY slipping to 99.76 — down 0.20% and holding below the 100 handle. Falling US yields set the tone, giving risk-sensitive and commodity-linked currencies room to bid. Oil was the standout macro driver: WTI crude rallied 1.78% to $82.70 and Brent added 1.52% to $88.39, pulling the Canadian dollar and Scandinavian currencies sharply higher against the greenback. Gold extended its bid to $4,399, up 0.82%, reinforcing the softer-dollar read. The Japanese yen recovered from two-week lows as traders leaned into BoJ tightening expectations, though USD/JPY’s decline was modest at -0.09%. The broader picture: a soft USD, firm commodities, and risk appetite intact heading into Europe.

Key Pairs for London

EUR/USD — 1.1555
The euro is pressing session highs, up 0.22% and sitting right at 1.1555. Hawkish ECB commentary is doing the heavy lifting here, with rate-cut expectations being pared back. The session high is the level to beat — a clean break above 1.1560 opens a run toward 1.1580-1.1600. Support sits at the Asian low of 1.1531. With the dollar broadly offered, the path of least resistance looks higher into the London fix.

USD/CAD — 1.3884
The biggest G10 mover overnight. USD/CAD has dropped 0.37%, driven almost entirely by the crude oil rally. The pair punched through the session low at 1.3884 and is testing that floor now. If WTI holds above $82, the next support zone sits near 1.3850. Resistance is back at the session high of 1.3933. London energy desks coming in could add fuel — this is a momentum trade until oil rolls over.

NZD/USD — 0.5877
The kiwi leads the G10 scoreboard with a 0.27% gain, pushing to 0.5877. The move is broad risk appetite rather than NZD-specific — AUD/USD is also firmer at 0.7075. The session high at 0.5877 is the immediate hurdle. A break opens 0.5900 as the next psychological target. The Asian low of 0.5848 is the line in the sand for bulls.

USD/JPY — 159.18
The yen is grinding higher after recovering from two-week lows, with USD/JPY slipping 0.09% to 159.18. Multiple desks are flagging BoJ tightening bets as the driver — Rabobank’s note on the tightening debate is the latest. The session low at 159.13 is nearby support; a break below reopens 158.80. Resistance at the session high of 159.53 looks heavy with rate expectations shifting. London could see follow-through selling if US yields continue to drift lower.

USD/NOK — 9.4545
The Norwegian krone rallied despite Norges Bank holding rates, with USD/NOK dropping 0.39% to 9.4545. Oil strength is overriding the initial post-hold softness. The session low of 9.4542 is being tested right now — a sustained break puts 9.4200 in play. Similar story in USD/SEK, down 0.48%, as the Scandinavian bloc benefits from the commodity and risk-on bid.

London Calendar Watch

The main event on the radar is US Retail Sales data, due during the New York overlap. The headlines are already positioning for it — the dollar’s softness ahead of the print suggests the market is bracing for a miss or is pre-positioned for weakness. Any upside surprise would snap the USD sell-off quickly. Beyond that, watch for ECB speaker commentary during early London hours — the hawkish tone flagged in overnight coverage could get reinforced or walked back. Friday afternoon liquidity typically thins after the London fix, so the first two hours of the European session are where the real directional moves will happen.

Bias Going In

EUR/USD bias is constructive above 1.1530 — the combination of hawkish ECB rhetoric and a soft dollar gives buyers the upper hand into London. GBP/USD at 1.3516 is riding the same USD weakness, though EUR/GBP creeping higher (+0.10%) suggests the euro is the preferred long over sterling. Commodity-linked pairs have room for follow-through: USD/CAD below 1.3900 with WTI above $82 is a momentum setup, and the Scandi crosses could extend if European energy markets confirm the overnight crude bid. The dollar’s tone is defensive — DXY below 100 with falling yields and risk appetite intact is a sell-the-rally environment until Retail Sales proves otherwise.

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