US Dollar challenges lows near 101.00, US data eyed

The greenback – in terms of the US Dollar Index (DXY) – has come under renewed selling pressure on Monday, currently testing session lows around the 101.00 handle.

US Dollar attention to US releases

The index is struggling to keep the trade above the critical 101.00 limestone at the beginning of the week amidst a tepid bias towards the riskier assets, with the exception of the British Pound.

In the meantime, USD is reverting Friday’s mild gains, although it is still unable to advance further north of the now strong resistance area in the 101.70/75 band (February tops). The almost exclusive catalyst for the Dollar keeps gravitating around Trump and the increasing uncertainty surrounding his political and economic measures, while there is no further details regarding the recently announced ‘phenomenal’ tax reform. The lack of a clear direction in this regard has been hurting yields in the US money markets in past sessions, removing at the same time important tailwinds for the USD rally.

In addition, speculators continued to scale back its net longs positions during the week ended on February 21, retreating to the lowest level since late October as showed by the latest CFTC report.

It will be a very interesting week for the buck in light of key releases in the US docket along with Fedspeak and speeches by President Donald Trump on Tuesday and Chairwoman Janet Yellen on Friday.

Today, Pending Home Sales, Durable Goods Orders and the Dallas Fed index should keep the attention on the buck, while Dallas Fed R.Kaplan (voter, hawkish) is also due to speak later in the session.

US Dollar relevant levels

The index is retreating 0.10% at 101.02 and a break below 100.86 (low Feb.23) would open the door to 100.64 (low Feb.24) and then 100.60 (20-day sma). On the other hand, the next up barrier aligns at 101.35 (55-day sma) followed by 101.75 (high Feb.15) and finally 101.95 (23.6% Fibo of the November-January up move).