Has the market turned from buy USD dips, to sell USD rallies
In the wake of last night's events, the USD seems to have reacted strongly to the drop in yields - as measured by the reaction of USD/JPY. Traditionally, if stock markets rally on positive risk sentiment, then we see the traditional safe havens taking a hit, but not even the JPY and CHF can benefit against the USD as risk sentiment improves - such is the interest to offload the greenback.
Alongside this, we have the ECB who have this week cranked up the dovish rhetoric again, but to little avail, as EUR/USD is now pushing for a test through 1.1300 and to challenge the 1.1350-70 area again.
Cable also seems to be setting aside Brexit concerns as we turn our attention to 1.2750-80, where we expect continued congestion to limit gains, if not 1.2800-20.
USD/CAD has been the strongest mover as we now look to push under 1.3200, and here, we can see losses pushing into the mid to early 1.3100's with strong Canadian data behind it - taking away the pressure for the BoC to turn dovish also.
All in all, it may be time to view the USD in a different light, though much depends on the US data in the coming weeks. With that in mind, near term interest could see dip buyers in EUR/USD in the mid 1.1200's, while Cable could find support ahead of 1.2600. USD/CAD is now unlikely to revisit 1.3400+ any time soon, so the tables have clearly turned - for now at least.