Yesterday's dollar rally hit resistance, today it broke through
The rally in the US dollar yesterday stalled at some key levels but today it has broken through.
Specifically, EUR/USD has fallen to a seven-week low in what's starting to look like a topping pattern:
Another notable break is in AUD/USD as it sinks below the September low in the third day of declines.
I still haven't seen enough to have confidence in a dollar bounce but we're clearly at an inflection point in a market that's off balance. The reality of the second virus wave in Europe is undoubtedly a factor and Japan may be intervening so signals may be skewed but every pip higher in the dollar increases the probability of a squeeze in the crowded short-USD trade.
