- DXY trades near the 104.20 zone after mixed reaction to PMI and Job Openings data.
- Manufacturing activity contracts and hiring slows, keeping stagflation risks in play.
- Resistance seen around 104.84 with support clustering near 104.13.
The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of currencies, trades near the 104.20 area on Tuesday, showing little directional bias after a series of soft US economic data releases. A weaker-than-expected ISM Manufacturing PMI print, a decline in Job Openings, and cautious Fed commentary paint a murky outlook for the Greenback. Despite modest gains, the technical backdrop remains fragile as traders look ahead to further macro drivers later this week.
Daily digest market movers: US Dollar steadies as cracks widen in data
- US ISM Manufacturing PMI fell to 49 in March from 50.3 in February, missing the 49.5 forecast.
- The sector's Employment Index dropped to 44.7, its lowest since last July, signaling a faster pace of job cuts.
- The Prices Paid Index surged to 69.4 from 62.4, pointing to renewed inflationary pressure amid tariff-linked supply issues.
- Chair of ISM's Business Survey Committee said demand remains confusing for businesses with destaffing and production cuts ongoing.
- US JOLTS Job Openings dropped to 7.56 million in February, below expectations and confirming labor market softening.
- Total hires and separations remained broadly unchanged at 5.4 million and 5.3 million, respectively.
- Fed’s Barkin warned that current data is hard to read, calling it “wrapped in a thick fog.”
- Despite declining Job Openings, the Fed’s updated SEP projects a stable Unemployment Rate near 4.4% in 2025.
- Currency markets appear less reactive to tariffs, focusing more on signs of economic stagnation or contraction.
- Traders are increasingly cautious ahead of Friday’s Nonfarm Payrolls (NFP) report.
- CME data shows low odds of a May rate cut, but dovish pressure could build with further data disappointments.
- The DXY continues to drift between 104.00 and 105.00 as the market searches for conviction.
- Risk sentiment remains fragile with traders wary of additional downside in equities and bonds.
Technical analysis
The US Dollar Index is posting modest gains on Tuesday, but the broader technical outlook remains bearish. The Moving Average Convergence Divergence (MACD) still signals a potential bullish crossover, yet longer-term indicators such as the 100-day and 200-day Simple Moving Averages (SMA), as well as the 30-day Exponential Moving Average (EMA), continue to flash sell signals.
The Relative Strength Index (RSI) at 76.92, alongside stochastic readings, points to overbought conditions, while the Awesome Oscillator remains neutral. The 20-day SMA offers mild bullish support. Resistance is located at 104.435, 104.841 and 104.847, while support lies near 104.169, 104.165 and 104.128.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds steady above 0.6300; looks to US NFP for fresh impetus
AUD/USD stalls the previous day's pullback from the 0.6400 neighborhood, or over a two-week high, and oscillates in a range during the Asian session on Friday ahead of the US NFP. In the meantime, the USD struggles to lure buyers as Trump's sweeping tariffs lift recession fears, which might force the Fed to resume its rate-cutting cycle soon.
USD/JPY recovers slightly from multi-month low; upside seems limited ahead of US NFP
USD/JPY attracts some buyers during the Asian session on Friday and moves away from its lowest level since October set the previous day. Investors scale back their expectations that the BoJ would raise policy rate at a faster pace amid worries that Trump's new tariffs could negatively impact Japan's economy, which is seen weighing on the JPY.
Gold holds positive ground above $3,100, all eyes on US NFP data
Gold price recovers some lost ground to near $3,115 during the Asian session on Thursday after facing some profit-taking in the previous session. Escalating concerns over a global trade war and ongoing geopolitical risks boost the Gold price, a traditional safe-haven asset.
What to expect from Bitcoin and XRP following Trump tariffs: Experts weigh in
Bitcoin stretched its decline on Thursday, briefly dropping below $83,000 as President Trump's newly announced reciprocal tariffs extended the crypto market downturn by over 4%. The sustained decline and high volatility highlight Bitcoin's increasing risk to macroeconomic uncertainties.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.