The US dollar remains in a holding pattern as traders brace for key tariff announcements that could shape market sentiment. With economic data painting a mixed picture—showing both resilience and signs of slowing—investors are closely watching for policy shifts that may impact the dollar’s momentum. As global trade tensions evolve, all eyes are on upcoming employment reports for further clues on the economic outlook.
The US Dollar Index (USDX) remained stable at 103.861 on Wednesday, maintaining a sideways trend as investors awaited a crucial tariff announcement from US President Donald Trump.
The government has confirmed that reciprocal tariffs on countries imposing duties on US exports will be implemented immediately, adding further uncertainty to the financial markets.
Recent economic data presented a mixed outlook. US factory activity experienced a contraction in March—the first decline this year—while inflationary pressures persisted for a second consecutive month, reflecting the ongoing impact of trade policies.
Furthermore, job openings decreased in February, although layoffs stayed relatively low, suggesting a gradual cooling in the labour market.
The USDX edged up by 0.03%, closing at 103.861 after an opening of 103.829. The index reached an intraday high of 103.961 before retracting slightly.
Short-term moving averages (MA 5,10,30) indicate bullish momentum, as they remain above the longer-term moving averages, suggesting continued upward movement.
The MACD (12,26,9) further supports this trend, with a widening histogram and the MACD line (blue) positioned above the signal line (yellow), indicating strong bullish sentiment.
Key technical levels to monitor include immediate resistance at 103.911 and support at 103.484.
A breakout above resistance could trigger further gains, whereas a dip below support may indicate a potential reversal and bearish momentum.
With investors closely monitoring upcoming tariff developments, market attention is also directed towards the ADP employment report and nonfarm payrolls data set for release later this week.
These reports will offer crucial insights into the state of the US labour market and could influence the Federal Reserve’s policy stance moving forward.
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