Key Points:
- US Dollar Index (USDX) holds steady, trading near 103.86.
- Market participants await President Trump’s tariff announcement.
- US factory activity contracts, raising concerns over the economy.
- Job openings decline, suggesting cooling labor market as market eyes ADP report and nonfarm payrolls for future Fed moves.
US Dollar Index Stabilizes Ahead of Key Tariff Announcements
The US Dollar Index (USDX) held steady at 103.861 on Wednesday, continuing its sideways movement this week as traders await US President Donald Trump’s upcoming tariff announcement.
The administration has confirmed that reciprocal tariffs on nations imposing duties on US goods will take effect immediately, adding further uncertainty to the market.
Economic Data Shows Signs of Cooling
Economic data showed mixed signals. The US factory activity contracted in March, marking the first decline of the year, while prices continued to rise for a second consecutive month, highlighting the persistent impact of tariffs. Additionally, job openings fell in February, although layoffs remained low, pointing to a gradually cooling labor market.
Technical Analysis
Picture: USDX tests resistance at 103.911 after rallying from 103.484, as seen on the VT Markets app.
The USDX rose by 0.03%, closing at 103.861 after opening at 103.829. The session saw a rise to a high of 103.961 before retracing to close near 103.861.
The moving averages (MA 5,10,30) show bullish momentum, with short-term MAs remaining above the longer-term averages, suggesting a continuation of upward price movement. The MACD (12,26,9) also confirms this, as the histogram is widening, and the MACD line (blue) is above the signal line (yellow), indicating strong bullish momentum.
Key levels to monitor include 103.911 as immediate resistance and 103.484 as key support. A break above resistance could signal further upside momentum, while a drop below support could suggest a reversal and possible bearish momentum.
Market Outlook
As markets prepare for more tariff news, traders are focusing on the ADP employment report and the nonfarm payrolls data scheduled for release this week. These figures will provide additional insights into the health of the US labor market and potential shifts in Federal Reserve policy.
