US Dollar reclaims 100, supported at 99.90

 The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, dropped below the critical 100 level in the first half of the American session but was able to find support at 99.90. At the moment, the index is down 0.5% at 100.

A fresh USD selling wave dominated the markets when the American traders came back from a long weekend. Friday's inflation data, which hasn't received a significant reaction on Friday, accompanied by today's weak data pushed investors away from the greenback.

On Friday, the U.S. Bureau of Labor Statistics announced that the Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.3 percent in March on a seasonally adjusted basis. That reading marked the first monthly drop since February 2016, allowing the Fed to refrain from an aggressive rate hike path. In fact, the CME Group FedWatch tool's rate hike probability in June fell to 46.5% from 63% last week. Additionally, weak retail sales data revealed that the consumers have been less willing to spend, making it harder for the inflation to continue rising.

Technical outlook

The index could face the initial resistance at 100.50 (Apr. 13 high) on its way to 100.75 (Apr. 12 high) and 101 (psychological level). To the flip side, supports align at 99.90 (daily low), 99.50 (Mar. 23 low) and 99.00 (Mar. 28 low/psychological level).