07 Apr 2025

On Friday, the US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six key currencies, increased and approached the 103 level, buoyed by robust job data that mitigated concerns over ongoing tariff issues.

Federal Reserve Chair Jerome Powell cautioned that tariffs could lead to higher inflation and hinder economic growth, while suggesting that there is no immediate need for policy adjustments.

Resistance levels are identified at 103.73 and above, while support is positioned around 102.61, as the technical outlook continues to reflect a predominantly bearish trend.

Daily market movers summary: US Dollar rebounds as Powell finds equilibrium

    In March, US Nonfarm Payrolls experienced a significant increase, reaching 228,000, far surpassing the anticipated 135,000 and exceeding even the most optimistic estimates.
    Federal Reserve Chair Powell recognized that tariffs might exert a more substantial inflationary and economic influence than previously expected, although any policy adjustments are currently paused.
    He emphasized that while inflation is nearing the target, it remains somewhat elevated, and the Fed is closely observing uncertainties stemming from federal policies, particularly in trade.
    Powell asserted that the Fed's responsibility is to prevent temporary price increases from evolving into sustained inflation, although long-term expectations remain stable.
    In response, China swiftly imposed a 34% tariff on all US imports effective April 10, heightening concerns about a prolonged trade dispute.
    Powell also pointed out a deceleration in progress towards the 2% inflation goal, while affirming that the labor market is stable with low unemployment rates.
    Surveys reveal a decline in sentiment and an increase in uncertainty amid rising geopolitical and economic tensions.

Technical Analysis

The US Dollar Index (DXY) experiences a slight increase during Friday's trading session; however, bearish signals remain evident as it stabilizes around the 103 mark. The Moving Average Convergence Divergence (MACD) continues to indicate a sell signal, and the Relative Strength Index (RSI) stands at 35.58—within neutral territory—suggesting a weak bullish momentum. The 20-day, 100-day, and 200-day Simple Moving Averages (SMA), along with the 10-day Exponential Moving Average (EMA), all indicate a bearish trend. Additionally, the Ultimate Oscillator and Stochastic %K are neutral, reinforcing a sense of indecision in the market. On the upside, resistance levels are identified at 103.50, 103.73, and 103.81. Conversely, support is positioned at 102.61, with the potential for increased pressure if this level is breached.