Investing.com -- The bearish trend for the US dollar (USD) is gaining momentum following a significant selloff last week.
According to BofA, the Option Flow and Technical Matrix, both indicate signs of a continuing bearish USD trend against European currencies, the Canadian dollar (CAD), and the Japanese yen (JPY) in the G10 group.
There are indications of a structural weakness in the USD. Despite short-term fair values suggesting the USD was oversold at the start of last week, as reported on FX Watch on April 9, 2025, the supply of USD in the foreign exchange (FX) market has continued unabated.
Investors in the FX market are likely shifting their focus beyond short-term valuations. They may seek to drive the USD weaker until it approaches long-term equilibrium levels, as noted in FX Viewpoint on September 11, 2024.
Furthermore, a time zone analysis reveals that the recent USD weakness has been mainly concentrated during trading hours in Europe and Asia.
Interestingly, the USD selloff has become independent of the Federal Reserve’s rate cut pricing. This suggests that the selling of USD in non-US hours is continuing, contributing to the bearish USD trend.
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