KONTAN.CO.ID -  SYDNEY. The U.S. dollar was struggling to keep a rare rally together on Monday as its longest losing streak in a decade left much of the market structurally short of the currency and vulnerable to a squeeze on any upbeat news.

Bears were caught out by a better payrolls report on Friday, which pushed Treasury yields higher into this week's massive $112 billion debt sale. Yet the dollar still ended lower for the seventh week in a row.

"Our portfolio has been positioned for a number of weeks now for a narrowly weaker USD as a consequence of the independent surge in COVID-19 infections in the U.S. that has opened up a decent gap in near-term economic performance, especially against Europe," said analysts at JPMorgan in a note.

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"Our positions have been concentrated in the EUR-bloc, reflecting also the structural improvement in the European policy framework following the agreement over the recovery fund."

The euro edged up to $1.1791 on Monday, having hit a two-year high of $1.1915 last week, which now acts as major resistance. Support comes in around $1.1755 and $1.1694.

Turnover was light with Tokyo on a holiday and considerable uncertainty on whether U.S. policymakers can agree a new package of fiscal support for the virus-hit economy.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Sunday said they were open to restarting COVID-19 aid talks, after President Donald Trump took executive actions on unemployment benefits.

Editor: Anna Suci Perwitasari