The dollar is not letting up just yet to start the new week
Risk trades may be retracing slightly after yesterday’s sharp losses but in FX, the dollar is still keeping more resilient as we get into European morning trade.
Commodity currencies are leading losses but it isn’t so much just contained to that space, as the euro and pound are also tracking lower against the dollar.
EUR/USD is contesting a fall below trendline support @ 1.1782 and nears the lows seen on 13-14 July @ 1.1772, which offers a daily support region. Below that, there isn’t much stopping the pair from a sharper drop towards the 31 March low @ 1.1704.
The euro saw a sharp reversal briefly yesterday, possibly amid some unwinding in carry trades, but for now, the dollar momentum is one that is tough to ignore as it is exposing plenty of technical vulnerabilities across multiple charts.