US Dollar risks a test of 100.00

The greenback – tracked by the US Dollar Index (DXY) – remain well on the defensive at the beginning of the week, testing lows in the 100.30 region for the time being.

US Dollar weaker post-Trump speech

USD has come under further selling pressure on Monday, extending last week’s bearishness and approaching the psychological support at the 100.00 handle.

The index is retreating for the fifth consecutive week so far, as market participants are unwinding their USD-long positions at a faster pace following the recent speech by President Donald Trump at his inauguration on Friday.

The protectionist tone from President Trump at his speech has encouraged sellers to remain in the markets and intensified further the scepticism over the ability of the new administration to deliver the promised boost to the economy mainly via extra fiscal stimulus.

In the meantime, USD speculative net longs continued to retreat during the week ended on January 17, falling to levels last seen in late November, as per the latest CFTC report. 

Nothing scheduled today in the US docket, while the salient releases will be the flash Q4 GDP figures and the Reuters/Michigan index, both due on Friday.

US Dollar relevant levels

The index is retreating 0.42% at 100.33 facing the immediate support at 100.23 (low Jan.17) followed by 99.87 (low Dec.5) and finally 99.49 (low Dec.8). On the upside, a breakout of 101.23 (55-day sma) would open the door to 101.71 (high Jan.16) and then 101.84 (20-day sma).