US dollar ends higher, consolidating around 101.50

The US dollar and the Japanese yen were among the to performers in the currency market on Monday boosted by risk aversion. Uncertainty regarding Trump’s policies and fears of a hard Brexit weighted on equities in Europe. The pound tumbled across the board. 

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Consolidation ahead of Trump

The US Dollar index, which gauges the US dollar against its main competitors, ended around 101.50, up 0.35% for the day. It opened with a bullish gap (partially closed) and peaked at 101.70, the highest since Wednesday but then pulled back toward 101.50. 

Despite today’s gains the DXY continues to move with a bearish bias in the short-term as it continues to pull back from 14-year highs. So far the area around 100.60 and the 55-day MA are offering support, a break lower could expose the 100.00 handle. The 20-day MA has turned south and currently stands at 102.30: if the index rises back above it could give a fresh upside push for a test of multi-year highs. 

The pair is consolidating after the correction that took place during the previous two weeks. Today’s low volatility could be associate with a holiday in the the US. Volatility could rise ahead of Donald Trump’s inauguration. Regarding economic data from the US, the most important day of the week will be Wednesday with the release of inflation and industrial production data.