The selloff in the dollar may be losing a bit of momentum but unless the selling in the bond market returns, the greenback may still find any rebound or recovery to be limited. USD/JPY is trading to the lows for the day now near 139.00 as price action is not helped by Treasury yields being pinned at the lows as well. 10-year yields are down 1 bps to 3.684% currently.
A bounce back higher in yields is very much needed to vindicate any dollar recovery, especially since broader market sentiment has gotten so accustomed to the buy the dollar, sell everything else narrative; vice versa.
The technicals show that 10-year yields could run towards 3.60% - the lows seen in October - next before switching course. If so, the dollar is still in for a tough time despite Fed policymakers maintaining that they will keep up with rate hikes until about 5%.
