So, is the TACO trade back on? Or did it ever really left? The dollar has been stronger in recent weeks but a lot of that seems to be tied to a short squeeze rather than any material change in sentiment. If it is, the charts are the number one spot in weighing up the momentum and strength of any squeeze. So, let's take a look at how things are shaping up today.
Previously, the 100 (red line) and 200-hour (blue line) moving averages have helped to keep a lid on things as the dollar short squeeze runs its course. But after the drop in the dollar yesterday, we're seeing price action keep above those levels now. As such, the near-term bias has now flipped to being more bearish against the dollar.
However, not all is lost for the dollar yet though. There is still some mixed sentiment out there when you factor in other major pairs too.
If the dollar is to make a stand, this will be one of the first spots to watch as it is also one that is sensitive to fluctuation in yields. That being said, just be wary that the yen has its own thing going on amid political uncertainty back in Japan.
Besides this though, AUD/USD is one to also helping to keep dollar bulls in the game a little more after the drop yesterday.
For the aussie, it's at least a modest recovery after the terrible jobs report seen last week here.
The drop yesterday has definitely weakened the dollar's standing. And in doing so, the short squeeze momentum looks to be halted for now. If dollar bulls are to try and make a go of it again, there is work to be done as evident by the charts. Otherwise, we seem to be caught in a bit of a battle until traders pick a clear side on what to follow ahead of the 1 August trade deadline.
Head on over to investingLive (formerly ForexLive) to get in on the know!
This article was written by Justin Low at investinglive.com.Hence then, the article about dollar weakened by drop yesterday as short squeeze loses momentum was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Dollar weakened by drop yesterday as short squeeze loses momentum )
Also on site :