The growth of the dollar may be limited

The current strengthening of the dollar as a result of sharp increase in the yield of US Treasuries should not be viewed as a default option in terms of future. Markets somehow too quickly forgot about the political problems in the USA (and in fact the scandal with the Presidency of Trump is still in progress). Yes, we can pretend that nothing is happening, but the essence of the matter will not be changed by this. Something is still happening. And this something is quite an unpleasant thing for both Trump and the dollar in the eyes of the investors.

The trading wars were somewhat subdued, but no one had yet stopped them. Pushing the deadlines for solving the problem does not solve the problem.

Yesterday's FOMC meeting as expected ended with unchanged rates. As for the general rhetoric, it cannot be called aggressive. This again does not play into the favor of the dollar.

So, from the point of view of fundamental analysis, the further growth of the dollar is questionable. At any time, markets can switch to old problems, which will provoke a sell-off of the dollar on all fronts. Perhaps the reason for this can be the data on the US labor market, which will be published on Friday.

Technically, the dollar, at least in the short term, looks heavily overbought. Oscillator RSI (8) is above 85 on the daily chart which is abnormal. And the series of daily closes above the upper Bollinger band once again confirms that the dollar needs a correction.

In total, we believe that now it is the time to open short positions on the dollar. The most promising in this regard are the British pound and, accordingly, the purchase of the GBPUSD pair, as well as the Australian dollar and the purchase of the AUDUSD pair.