Well, it looks like the dollar is making a stand by putting its foot down to halt the rout from last week. USD/JPY is leading the charge this week in a reversal back above 140.00 now. I did say on Monday here that if the dollar was to drop further, it would need the pair to provide the key to unlock that move. Alas, it doesn't seem like USD/JPY has given that approval.
Other dollar pairs are also following suit but with varying degrees. EUR/USD had consolidated gains above 1.1200 before falling to 1.1130-40 levels now. The pair is caught in a 10 pips range today, so that is quite the snoozer. Meanwhile, GBP/USD has tumbled back below 1.2900 after the softer UK CPI data this week.
It seems like we're seeing price action get a little more cagey and tentative, as we gear towards the key central bank policy decisions next week. The Fed, ECB, and BOJ are all on the agenda and that will make for an interesting end to July trading at least.
As for now, it seems like the dollar may just be consolidating its position as the selling from last week hits pause. It is time to reassess those trades again and to weigh them up against next week's prospects.
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