The dollar is back down again today, keeping with some relative softness from yesterday in US trading as well. The greenback was sitting higher on Monday but that is before the return of North American traders from the long weekend. US-China trade tensions remain the key driver of trading sentiment this week, with Trump stirring the pot again yesterday here.
This is all keeping markets on edge and that's not helping with the broader market mood in general. All it takes is for things to escalate by just one step and we'll see market players react to how they have back in April through to June And therein lies the risks for the dollar as well, after having found some stability in the past few months.
So far this week though, the back and forth price action is what stands out. But now as we near the halfway point on the week, we are starting to see the dollar lose momentum with near-term price bias starting to favour sellers.
EUR/USD may be only up 0.1% to 1.1622 on the day but the nudge higher overnight sees the 100-hour moving average (red line) breached. That suggests the near-term bias is now more neutral, with price action sitting in between that (at 1.1589) and the 200-hour moving average (blue line) - seen at 1.1636.
But perhaps the more interesting one is USD/JPY, with the pair opening with a slight gap higher on Monday before being filled yesterday. Since then, price has been running lower and we're now even seeing a break of the 200-hour moving average (blue line) of 151.29. Keep below that and the near-term bias stays more bearish.
In the bigger picture, there's also still the gap higher from last Monday to fill.
