US Dollar looking for direction around 99.00

The greenback – when tracked by the US Dollar Index – is trading almost unchanged at the beginning of the week, holding on to the key 99.00 barrier following the Asian close.

US Dollar finds support near 99.00

The index has sold off from the 99.80 region during the second half of last week, although it managed to close the week with gains after four consecutive pullbacks.

Lower-than-expected inflation figures and retail sales during April have removed some tailwinds from the buck, prompting US yields to plummet to the lower bound of the recent range.

DXY is now struggling around the critical 99.00 handle, where sit a retracement of the April-may drop, the 200-day sma and the 12-month resistance/support line.

From the speculative front, USD net longs continued to give way during the week ended on May 9, this time retreating to the lowest level since mid-October 2016 as per the latest CFTC report.

In the US data space, the NY Empire State index is expected later along with TIC flows for the month of March and the NAHB index.

US Dollar relevant levels

The index is losing 0.03% at 99.02 and a break below 98.96 (low May 9) would open the door to 98.56 (low Apr.25) and then 98.36 (2017 low May 8). On the upside, the next hurdle lines up at 99.18 (200-day sma/12-month resistance line) ahead of 99.47 (38.2% Fibo of the April-May drop) and finally 99.77 (high May 11).