The US Dollar longs were cleared out on Fed chairman Powell.

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• The US Dollar longs were cleared out on Fed chairman Powell.
• However, the drop in the greenback could be seen as a discount to the most bullish of the US Dollar bulls.

The US Dollar, as measured by the DXY index, fell from a high of 103.49 to a low of 103.001 after comments from Federal Reserve’s Jerome Powell circulated the wires. Powell is peaking at The Economic Club of Washington, D.C. Signature Event and repeated much of the same as he did at the press conference that followed last week’s interest rate decision.

The US economy added 517K jobs in January, the most since July and much more than market expectations of 185K. Following the release of the Nonfarm Payrolls data on Friday, ISM services data pointed to a strong services sector, adding to concerns about persistent inflation and bolstering the case for more rate increases.

However, we have seen a shake out of the in-the-money US Dollar longs during this event with a rally in the Euro, for instance:

However, there was a bounce in the greenback in more recent moments during his comments which has sunk the Euro as risk appetite dwindled:

This is a 61.8% ratio retracement in the DXY index and a firm one at that with support at 103.00 holding steadfast. The longs were cleared out, but this could be seen as a discount to the most bullish of the US Dollar bulls.

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