US dollar extends slide after record ISM services report

US dollar lower across the board

The US economy is sizzling but the dollar is slumping.

The dollar has fallen about 50 pips across the board since the start of New York trade. It’s making fresh lows at the moment in what’s been a relatively quick move.

Some levels are starting to come into play. USD/CAD has taken out last week’s lows and AUD/USD is a few pips away from last week’s high of 0.7664.

US dollar lower across the board

This pair has traced out a well-scouted head-and-shoulders pattern but if it can break higher, it can nullify it before breaking the neckline.

Another interesting spot is cable, which benefits from a big seasonal tailwind this month. It’s flirting with 1.39 and not much is standing in the way of a test of 1.40.

The dollar drop isn’t following the usual catalysts. For much of this year, good news has been good news for the dollar. However we’re seeing the US yields haven’t been able to break to new highs on sensational jobs and ISM services report, so maybe that’s a tell.

You also have the argument that higher commodity prices are beneficial elsewhere and that ultimately the vaccine will get to Europe.

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