- The US dollar index is quoted around the 98.50 area after bouncing a minimum of three years at the beginning of Tuesday’s session.
- The threats of President Trump to fire the president of the FED, Powell, continue to undermine confidence in the US monetary policy.
- Technical indicators suggest deep over -sales conditions, with resistance about 100.01 and 101.30 limiting the rise.
The US dollar index (DXY) struggled to extend its rebound on Tuesday, remaining close to the 98.50 zone after recovering slightly from the minimum of three years of 98.01. The rebound occurred when the markets reopened after Easter Monday and reevaluated the broader macroeconomic panorama. However, the rise attempts were limited by the renewed fears about the autonomy of the Federal Reserve (FED) after the sustained attacks of US President Donald Trump to the president of the Fed, Jerome Powell.
Trump’s criticism, calling Powell “a great loser” and threatening to dismiss him for not cutting fees, have alarmed investors and have affected the long -term credibility of the dollar. These concerns were amplified by the admission of the Economic Advisor of the White House, Kevin Hassett, that the administration is actively exploring legal routes to dismiss Powell. Such developments have shaken the USD’s safe refuge status and added volatility to US assets.
Daily summary of market movements: USD is stabilized, still negative perspective
- EUR/USD and GBP/USD both backed up of maximums of several years while the operators took profits and the DXY stabilized about 98.50.
- The IMF’s perspective highlighted the downward risks for global and US growth amid the policy unpredictability, while the Richmond Fed manufacturing index fell to −13, its lowest level since November.
- Trump’s statements in Truthsocial continued to dominate the headlines: he reaffirmed his criticisms of Powell and suggested that there is no inflation, contradicting the recent comments of the Fed.
- Market attention is now focused on the key US data that will be published later this week, including PMIs and durable goods, while several Fed speakers could address the issue of institutional independence.
- Analysts warn that prolonged interference in the FED policy could deepen the weakness of the USD and harm confidence in the US as an anchor of reserve currency.
Technical analysis: DXY fights over -sales pressure, but the perspective remains fragile
The technical panorama remains strongly bassist for the index of the US dollar (DXY), which quotes around 98.48 in Tuesday’s session in the USA. Despite a slight daily gain, the broader structure does not show signs of a lasting recovery. The Relative Force Index (RSI) prints 25.38, pointing out a possible overall rebound. Similarly, the percentage range of Williams in −91.15 offers a purchase signal, although short -term oscillators such as rapid stochastic RSI remain neutral.
The momentum continues to favor sellers. The MACD is firmly maintained in mode of sale, and the key mobile socks reinforce this bias: the simple mobile average (SMA) of 20 days in 101.96, the 100 -day in 105.96, and the 200 -day in 104.60 are all in downward trend. Additional bearish signals are provided by the EMA of 10 days in 100.01 and the SMA in 100.17, both acting as key resistance areas.
Immediate support is observed at 98.33. A rupture below this level could re -expose the area of 97.73. In the upper part, 100.01, 100.17 and 101.30 serve as short -term resistance levels. While short -term indicators suggest a rebound, the broader trend remains vulnerable without a resolution to ongoing political and economic tensions.
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
