US Dollar stays calm near five-month low, at 99.70

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, has been spending the last couple of hours in a very tight range around 99.70 as the day's sharp sell-off is taking a break after pushing the index to a new five-month low at 98.57. As of writing, the index was at 98.68, down 0.24% on the day.

Today's uninspiring macro data from the U.S. hurt the demand for the greenback during the American session, as the consumer confidence dropped in April. On the other hand, positive numbers from the housing sector were largely ignored.

The investors will be keeping a close eye on tomorrow's announcement, which will reveal the details of the tax reform in the United States. A positive reaction from the stock markets should increase the risk appetite, pushing the U.S. Treasury yields higher and possibly helping the US Dollar Index correct some of its recent losses. However, the usual correlation between the bond yields and the DXY hasn't been effective since the week started as the markets remained focused on the European currencies.

• U.S. President Trump reportedly to proposing to slash the tax rate on pass-through companies to 15% - WSJ
• U.S. President Trump's administration drops support for border adjustment tax - NYT

Technical outlook

A break below 98.30 (Nov. 10 low) could open the door towards 98 (psychological level) and 97.60 (Nov. 1 low). On the upside, the immediate resistance is located at 99 (psychological level) ahead of 99.75 (Mar. 23 low) and 100 (psychological level).