Check out my last video on this. Retracement has been fulfilled...
The Euro and Aussie are vying for top spot among the non-Usd G10 currencies, with the former back above 1.2100 after breaching the 50 DMA at 1.2091, and the latter retesting 0.7700 where big option expiries reside (1.2 bn). Eur/Usd may also be deriving some traction from Italy following PM Conte’s vote of confidence from the Chamber of Deputies, though tonight’s Senate result will likely be a much tighter call as he needs 161 votes to survive vs current expectations of 154-158 in his favour. For the record, only modest upside in reaction to a firmer than forecast ZEW survey towards 1.2130 as Germany looks set to extend its lockdown until mid-February from the end of this month.
Buck bulls have been impeded by a broad upturn in risk sentiment first and foremost, but the fact that the index failed to sustain gains through a key technical level in the form of the 50 DMA at 90.931 on Monday vs 90.927 today, and extend beyond 91.000 may also be telling. However, the DXY is holding around 90.500 on the way back down to keep chart proponents encouraged and it would be far too premature to suggest that the Dollar is set for a complete turnaround Tuesday in terms of its overall recovery from worst levels, barring a further, deeper retreat or something more detrimental from US Treasury Secretary nominee Yellen at her confirmation hearing.