Fourier transform holography (FTH) is a noise-resistant imaging technique which allows for nanometer spatial resolution x-ray imaging, where the inclusion of a small reference scattering object provides the otherwise missing phase information. With FTH, one normally requires a considerable distance between the sample and the reference to ensure spatial separation of the reconstruction and its autocorrelation. We demonstrate however that this requirement can be omitted at the small cost of iteratively separating the reconstruction and autocorrelation. In doing so, the photon efficiency of FTH can be increased due to a smaller illumination area, and we show how the presence of the reference prevents the non-uniqueness problems often encountered with plane-wave iterative phase retrieval. The method was tested on a cobalt/platinum multilayer exhibiting out of plane magnetized domains, where the magnetic circular dichroism effect was used to image the magnetic domains at the cobalt L₃-edge at 780eV.