US Dollar holding on to 90.00 ahead of data

• The index has retreated from recent tops above the 90.00 handle.
• The correction lower comes in line with softer US 10-year yields.
• US housing sector data, advanced U-Mich index due later.

The greenback, in terms of the US Dollar Index (DXY), has started the session on a negative mood and continues to fade the recent bullish attempt, at the same time putting the 90.00 support to the test.

US Dollar attention to data, US politics

After advancing to the vicinity of 90.20 during early trade, the index has sparked a correction lower and is now challenging the critical support at 90.00 the figure.

The greenback came under renewed selling pressure following the Washington Post story that President Trump could fire National Security Adviser H.McMaster, lending extra wings to the safe haven JPY and in turn forcing USD/JPY to retreat further (while at the same time dragging the buck lower).

In the meantime, the US political scenario (Trump’s cabinet reshuffle), geopolitical jitters (further US sanctions against Russia) and policy trade (potential tariffs on Chinese products) appear poised to drive the sentiment around USD, at least in the very near term.

On the US data front, Housing Starts and Building Permits are due later, seconded by the flash print of Consumer Sentiment for the current month and Industrial/Manufacturing Production during February.

US Dollar relevant levels

As of writing the index is retreating 0.14% at 90.00 facing the next down barrier at 89.43 (low Mar.7) seconded by 88.44 (low Jan.26) and then 88.25 (2018 low Feb.16). On the flip side, a break above 90.57 (high Feb.8) would open the door to 90.93 (high Mar.1) and finally 91.00 (high Jan.18).