The dollar saw a bit of a turnaround late yesterday after fixing flows played a part in helping it gain, amid the sour risk mood. But despite the turnaround, we are seeing the dollar come back into favour today.
With European equities marked lower alongside US futures, the dollar is firming alongside the yen to start the session. EUR/USD is down 0.4% to 1.0435 currently:
That will put the pressure on a firm break below 1.0400 again with the region around 1.0349-59 being a focus point.
Elsewhere, GBP/USD is down 0.6% to test 1.2100 again and may look poised towards a push to retest 1.2000. Then, we have the aussie and kiwi which are both experiencing technical breakdowns against the greenback as outlined here.
Despite falling yields and contrarian opportunities, it is still tough to bet against the greenback at the moment especially when there is a lack of switch around ongoing market narratives. I would argue that we may only start seeing the dollar find reason to retreat once inflation figures slow considerably or if the Fed rate cut bets start to overshadow the tightening cycle.