The dollar is weaker as we get things going in European trading
The greenback managed a brief reprieve in Friday trading but saw gains evaporate as it keeps in a more vulnerable spot this month - even as yields track higher.
Cable is on staying on course towards 1.4000 while EUR/USD is now starting to look towards the highs last week once again:
The pair is keeping a bounce above its 100-day moving average (red line) but gains are still largely limited around the 50.0 retracement level of the swing move lower this year, seen @ 1.2150 - which also capped the gains last week.
While the yen is also in a more tepid spot today, that owes to the exuberance in equities as European equities are set to shine after the gains seen in Wall Street on Friday.
The more positive risk mood also doesn't work in favour of the dollar but the technical story says that the greenback is looking vulnerable as well:
The Bloomberg dollar index shows that the dollar has fallen back below its broken trendline resistance and is also tracking under the short-term trendline support this year.
Meanwhile, the dollar index shows a similar break below its broken trendline resistance but the 90.00 level is still somewhat intact for now at least.
In short, the dollar has lost much of its relief momentum to start the year and stays in a precarious spot with the potential to revisit the lows seen in early January.
That said, buyers have not completely thrown in the towel just yet either.
The big picture narrative remains that as the Fed put stays in play, the path of least resistance for the dollar is for a move lower. However, another short squeeze may not be completely out of the picture if positioning gets stretched once again.