Key Points
- USD Index hits 99.316, up from a low of 97.656, gaining 0.81%.
- Trump says he has “no intention” of firing Fed Chair Powell, easing market anxiety.
- Dollar rallies 0.75% against the yen and 0.7% vs the Swiss franc.
- Hopes of reduced China tariffs provide additional tailwinds for the greenback.
The U.S. dollar staged a powerful rebound early Wednesday, erasing multi-day losses as traders welcomed a rare moment of clarity from Washington. President Donald Trump’s public reassurance that he will not fire Fed Chair Jerome Powell marked a key inflection point, restoring a degree of calm to jittery currency markets.
Further fuelling the rally, Trump hinted at possible tariff relief in future China trade deals, which softened the broader risk-off mood. U.S. Treasury Secretary Scott Bessent echoed similar optimism at a private event, dampening fears of full-scale decoupling between the two superpowers.
Technical Analysis
The US Dollar Index (USDX) has extended its recovery, rallying from the 97.65 support zone to a fresh high of 99.316. The price action shows a clear uptrend, with the moving averages (5, 10, 30) stacked bullishly and offering dynamic support throughout the session.
Picture: USDX climbs to 99.31 before pausing; momentum cools as price tests support at 98.89, as seen on the VT Markets app
However, after tagging the 99.316 resistance, price has begun to pull back slightly, as seen by the small bearish candles and the MACD histogram starting to taper off. The MACD line remains above the signal line for now, suggesting bullish bias is still intact, but momentum may be cooling in the short term.
If 98.89 support (previous breakout level) holds, bulls may reload for another push toward 99.50. A break below the 30-MA could suggest deeper retracement toward 98.60.
While the dollar has clawed back ground lost to risk aversion and policy uncertainty, its path forward will depend heavily on concrete steps in trade negotiations and consistency from the White House. If Powell’s autonomy holds and tariffs trend lower, USD strength may persist into May.
