The dollar has tended to drift lower so far this week but we are not convinced this is a sustainable move. The correction in USD/JPY is taking on the shape of a bullish flag on intraday charts suggesting the uptrend is poised to resume. Intraday charts in AUD/USD also highlight the risk for near-term USD gains. Bigger picture we remain focused on fixed income markets looking to see whether momentum stays with the recent bearish move; bund yields breaking 2.08% would boost the sell-off.
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Barclays Capital