The dollar fell yesterday alongside a drop in Treasury yields, as markets are starting to gear towards choosing a side on what will happen on the trade front come the 1 August deadline. The recent comments by US officials suggest that the deadline is one that can be overlooked, with Bessent emphasising that they want "quality" over rushing any deals.So, is the TACO trade back on? Or did it ever really left? The dollar has been stronger in recent weeks but a lot of that seems to be tied to a short squeeze rather than any material change in sentiment. If it is, the charts are the number one spot in weighing up the momentum and strength of any squeeze. So, let's take a look at how things are shaping up today.In the case of EUR/USD and GBP/USD, the pair are already seeing price action move back above key near-term levels.Previously, the 100 (red line) and 200-hour (blue line) moving averages have helped to keep a lid on things as the dollar short squeeze runs its course. But after the drop in the dollar yesterday, we're seeing price action keep above those levels now. As such, the near-term bias has now flipped to being more bearish against the dollar.For dollar bulls, they will have to reclaim those key battle lines in resuming the downside for the pairs above. Otherwise, it could be a signal of a potential return of selling pressures as we approach the key trade deadline at the end of next week.However, not all is lost for the dollar yet though. There is still some mixed sentiment out there when you factor in other major pairs too.USD/JPY is one that also broke to the downside yesterday as the dollar fell but is now moving back up to test back its own 200-hour moving average. Keep below that and the near-term bias stays more bearish but break back above and the bias switches back to being more neutral again.If the dollar is to make a stand, this will be one of the first spots to watch as it is also one that is sensitive to fluctuation in yields. That being said, just be wary that the yen has its own thing going on amid political uncertainty back in Japan.With JGB yields also staying underpinned, that's a point of concern for the BOJ and for the currency as well.Besides this though, AUD/USD is one to also helping to keep dollar bulls in the game a little more after the drop yesterday.The pair continues to hold the line at the key hourly moving averages, with the 200-hour moving average especially limiting the upside seen since the end of last week. That said, sellers are also not quite seizing near-term control as well. So, things are very much still up for grabs on the week.For the aussie, it's at least a modest recovery after the terrible jobs report seen last week here.So, what does this all say about dollar sentiment going into the day ahead?The drop yesterday has definitely weakened the dollar's standing. And in doing so, the short squeeze momentum looks to be halted for now. If dollar bulls are to try and make a go of it again, there is work to be done as evident by the charts. Otherwise, we seem to be caught in a bit of a battle until traders pick a clear side on what to follow ahead of the 1 August trade deadline.Is it going to be chasing the TACO trade again? Or is it a case of balancing that out with Trump following through on tariffs?Head on over to investingLive (formerly ForexLive) to get in on the know! This article was written by Justin Low at investinglive.com.