[ForexNews]

With the risk rally taking a step back this morning, the USD has come off last week’s lows when the DXY index broke below its 200-day MA and hit its lowest level since the first few days of January. Technicals seem to be pointing toward a continuation of the weak USD trend, which could pick up if we get some more “green shoots” this week.

USD/JPY has been one of the big movers this morning, with the yen the only major currency outperforming the USD; USD/JPY broke meaningfully below 98.00 this morning for the first time this month, triggering a cluster of stops between 97.70 and 98.00. GBP has been an underperformer this morning, as the extension of the BoE’s QE program seems to be weighing on the pound. EUR/GBP hit a 10-day high of around 90 pence, and markets will be looking toward the Bank of England’s quarterly inflation report later this week for further direction.

This week is a big week for Chinese economic data, where most analysts are expecting to see further sign of recovery, thanks to the Chinese government throwing bucket-loads of money at its economic problems. CPI and PPI for April were released overnight and were both a touch softer than expected, but markets will be looking more closely at the other data out this week – international trade, fixed investment, retail sales, and industrial production.

Today should be a pretty quiet day, with almost no economic data out in North America, and no Fed speeches during market hours. We’ll be watching equity markets for direction.