The previous narrative in markets over the past few months was to buy the dollar, sell everything else. Right now, we’re in the midst of a correction or retracement of said narrative and it is pretty much sell the dollar, buy everything else.
Stocks and bonds are higher again today and that is pinning the dollar lower as we get things going on the session.
USD/JPY just took a quick tumble from 140.20 to 139.20, now down 0.4% on the day at around 139.35. This comes as sellers hold a defense of the 100-day moving average (red line) yesterday.
As such, this keeps the downside pressure on the dollar and an extension towards 135.00 may still be on the cards – especially if the dollar continues to show more vulnerabilities on the charts in other pairs as well. As highlighted here, the 200-day moving average for EUR/USD will be a crucial one to watch out for next.