US Dollar treading water below 95.00 ahead of US data

• DXY upside limited just above 95.00 so far.
• Trump-led tax reform optimism somewhat diminished.
• Personal income/spending, PCE on sight data wise in US.

The greenback, tracked by the US Dollar Index (DXY), is slightly on the defensive at the beginning of the week around the 94.70 region.

US Dollar focused on US data, ‘Trumponomics’

The index keeps shedding ground albeit at a glacial pace on Monday, as market participants continue to adjust to the likelihood that FOMC’s J.Powell could lead the Federal Reserve when Chief J.Yellen finishes her term in February, as per recent news citing President Trump could be favoring the current FOMC governor and permanent voter.

In addition, internal disputes in the Republican party threatens to plot against any progress on the tax reform proposed by President Trump. It is worth mentioning that the House of Representatives narrowly passed the blueprint of the budget for FY 2018, somewhat paving the way for the tax reform to be implemented at some point by year end.

Further out, the speculative community trimmed its USD net shorts to the lowest level in the last 2 weeks in the week ended on October 24, according to the latest CFTC report.

On the US data space today, personal income/spending is due along with inflation figures tracked by the PCE.

US Dollar relevant levels

As of writing the index is losing 0.11% at 94.72 and a break below 94.27 (high Oct.6) would expose 94.03 (23.6% Fibo of the 2017 drop) and finally 93.48 (low Oct.26). On the other hand, the initial hurdle aligns at 95.15 (high Oct.27) followed by 95.90 (38.2% Fibo of the 2017 drop) and then 96.84 (200-day sma).