Dollar falls across the board as the risk mood picks up in anticipation of Trump's address

The dollar is dropping in European morning trade as we see risk trades shoot up on the session. S&P 500 futures are up 0.5% with the high earlier seeing gains of 0.8% on the day. In Europe itself, major indices are posting over 2% gains in following up the positive momentum from Wall Street yesterday.

In other markets, we're seeing bond yields cool with 10-year Treasury yields down 4 bps to 4.275%. And in the oil market, we're seeing WTI crude drop back below $100 to $99.15 currently. The low earlier touched $96.50 as traders look to be growing more hopeful to put the Middle East conflict behind us.

All eyes now are on US president Trump's address at 0100 GMT later. He is expected to deliver an update on the Iran situation, with some anticipation that he will be hanging up the "mission accomplished" banner. I'll dive more into that in a separate post later.

As for the dollar, we are starting to see its upside momentum from recent weeks falter. That as the charts are starting to hint at a switch in the near-term bias again.

EUR/USD is seen creeping above the 1.1600 mark currently, though there are large option expiries at the figure level that could limit gains. If not, there's a big chunk layered at 1.1620-30 that could also limit the potential for further upside extensions in European trading.

But for now, we are seeing the pair push back above both its key hourly moving averages this week. And that signals that the near-term bias is now more bullish again. So, that's some negative reinforcement for the dollar.

Adding to that, we also have AUD/USD starting to test waters on its own break above both key hourly moving averages. The 200-hour moving average (blue line) is now in focus. And if buyers can keep above that, it will see the near-term bias also switch to being more bullish instead.

So, that is one key line in the sand with other dollar pairs also starting to lean towards a similar technical picture. AUD/USD is one that is notable as it often acts as a risk barometer, especially in this latest geopolitical episode. That considering the yen has fallen out of favour as a safe haven.