Key Points:
- USDX rose to 104.046, marking its third straight session of gains.
- Traders anticipate the Fed’s policy decision next week amid slowing inflation.
The US Dollar Index (USDX) climbed to 104.046 on Friday, extending its three-session winning streak as escalating global trade tensions pressured the euro and other major currencies.
On Thursday, President Donald Trump reaffirmed plans for reciprocal tariffs, including a potential 200% tariff on European alcoholic products, in retaliation for the EU’s 50% tariff on American whiskey and other US goods. The upcoming April 2 tariff deadline has fueled demand for the dollar as traders hedge against uncertainty.
Meanwhile, US inflation data for February came in lower than expected, with both consumer and producer price growth slowing. Weekly jobless claims stood at 220K, slightly below forecasts but in line with recent trends, adding to speculation that the Federal Reserve may hold interest rates steady at next week’s policy meeting.
Technical Analysis
The USDX is trading at 103.61, showing a marginal gain of 0.05% for the session. The price action has been choppy, fluctuating between 103.22 (support) and 104.04 (resistance). A brief rally pushed the index above 104.00 before facing selling pressure. The moving averages (5,10,30) indicate a short-term consolidation phase, while the MACD is stabilizing, suggesting a possible continuation of sideways movement unless a breakout occurs.
Picture: USDX hovers near 103.61 as traders assess breakout potential, as seen on the VT Markets app
A break above 104.04 could trigger further upside momentum, targeting 104.20-104.50, whereas a dip below 103.22 could expose the dollar index to further losses toward 103.00.
With global trade tensions intensifying and traders awaiting fresh policy signals from the Fed, the USDX remains positioned for further volatility in the coming days.
