The dollar managed a solid rebound towards the end of last week and is holding on to that coming into this week. Things are fairly calmer today, with light changes overall seen in the major currencies space. The dollar remains steady, as it looks to procure the next leg higher after last week’s moves.
So far today, we’ve gotten some verbal intervention from Tokyo and that is limiting the movement USD/JPY. Meanwhile, China also stepped in to prop up the yuan currency and is seeing USD/CNY pull back after last week’s breakout. That is keeping the shackles on the dollar as we look towards European trading later.
That being said, the focus remains on the charts more than anything else the moment. EUR/USD is little changed but is keeping near a test of the 1.0800 mark for now. And GBP/USD is holding near 1.2600, just off a test of its 200-day moving average at 1.2590 currently.
Then, there is USD/CHF which is running up against offers closer to 0.9000 after last week’s attempted break. And AUD/USD is also keeping just above 0.6500 with bids at the figure level and minor support around 0.6480-90 still holding.
In short, there is potential for the dollar to push some boundaries and establish the next leg higher from here. But with less key items on the agenda to work with this week, therein lies the challenge for dollar bulls. Do they have the appetite to run without much other impetus? At the moment, the technicals will be the one to be the judge of that.