The dollar is keeping higher across the board to start the new week
With cable down by over 250 pips and looking towards 1.3200 next, the aussie is another big loser in trading today as AUD/USD is dragged down by over 1%.
The pair is falling to fresh session lows of 0.7534 and is pushing below its 200-hour moving average (blue line) @ 0.7551 currently.
That sees sellers look to establish more near-term control in the pair.
Keep below that and the near-term bias turns more bearish with some minor support seen around 0.7500-07 before the 23.6 retracement level of the rally since November @ 0.7487 starts to come into play next.
As much as risk aversion is the name of the game today, 10-year Treasury yields are down 4.3 bps to 0.903% now and US futures are bleeding with S&P 500 futures down 0.6%, the pullback in the dollar has its own merits after the moves in recent weeks.
Since November up until last week, the dollar has been smashed across the board:
The aussie of course being the standout as it gained by more than 8% in that period.
As mentioned before, the short dollar trade is one that is arguably growing as a consensus as we head into next year and that always leaves room for some danger to violent and sharp pullbacks from time to time.
Amid year-end trading and a convenient "excuse" amid the new mutated virus strain, it seems like we are seeing that retracement in the dollar kick into gear for now.