Risk optimism is returning as markets are holding steadfast to re-opening hopes, despite China brushing aside the news from last week and saying that it is keeping firm on its zero-Covid policy. EUR/USD has now moved up to parity with GBP/USD running up to test its 200-hour moving average at 1.1463 after the early moves here and here respectively.
We are also seeing the greenback erase all of its early advance against the commodity currencies with AUD/USD now flat at 0.6470 as buyers retain their appetite to take a run against daily resistance at 0.6500 again:
Looking at price action after the US jobs report on Friday, this looks to be a market that will just about work with anything remotely positive and try its best to cling on to that.
For now, that is enough to offset the more hawkish Fed talk from last week and the technicals will be important to judge if there is enough appetite to see a further correction in sentiment ahead of the US CPI data later this week.