DXY inter-markets: well supported around 100.00

Despite the underlying bearish note remains well and sound around the US dollar in the near term, in the longer run the perspective of a stronger currency remains intact for the time being.

On the charts, the recent and quite sharp sell off in DXY found strong support in the 100.00/99.80 band, prompting a subsequent bull run that failed just ahead of the critical barrier at 101.00 the figure. The broader constructive tone stays supported by the support line off 2016 low on May 3, today around 97.20. This level also appears reinforced by the critical 200-day sma just above 97.30.

Auspicious data as of late have collaborated with the already strong US fundamentals, while the divergence in monetary policy between the Federal Reserve and its G10 peers keeps advocating for a stronger USD in the next months.

In the meantime, and on the macro front, increasing uncertainty surrounding the Trump’s administration and its potential policies remains a dark cloud lingering over the greenback, while the recent broad-based unease in response to Trump’s latest announces has been behind another correction lower in the buck.

Speculative positioning seems to be underpinning the recent lost of upside momentum around the Dollar, as net longs have retreated to the lowest level since mid-November.

All in all, US politics and Trump’s Twitter account have become unexpected drivers for the greenback’s price action in the near term, although in the longer term horizon USD should resume its (so far interrupted) upside.