Highlights:
- USDX edges up 0.12% to 99.149 after testing a session low of 98.904.
- Trump floats potential tariff reductions but escalates Fed criticism, creating policy uncertainty.
- Thin Good Friday trading volumes curb price swings.
The US dollar traded in a narrow range on Friday, settling at 99.15 as holiday-thinned markets limited activity. Despite the modest rebound, the greenback remains near three-year lows amid persistent concerns over trade policies and central bank direction.
Trade Hopes Clash With Fed Tensions
President Trump unexpectedly suggested a possible easing of China tariffs, hinting at both pausing new duties and rolling back existing ones, a move that could bolster risk appetite in coming sessions.
However, his renewed attacks on Fed Chair Jerome Powell dampened optimism. Trump accused Powell of being “too slow” to cut rates and doubled down on calls for his replacement, contradicting the Fed’s data-dependent stance. Markets now anticipate 86bps of rate cuts in 2025.
While a drop in US jobless claims to a two-month low offered the dollar brief support, Trump’s conflicting signals on trade and monetary policy have left traders hesitant, preventing sustained recovery from multi-year lows.
Technical Perspective
The USDX 15-minute chart shows choppy consolidation after bouncing off 98.904 support. The index remains trapped between resistance at 99.50 and support above 98.90, reflecting indecision.
Key observations:
- MACD (12,26,9): Bullish momentum fades as histogram nears zero; bearish crossover suggests potential support retest.
- Price Action: Failure to hold above the 30-period MA reinforces near-term weakness.
Levels to Watch
- Upside Break: A clear move above 99.50 could signal bullish continuation.
- Downside Risk: Breaching 98.90 may accelerate declines toward 98.50.
With catalysts lacking, range-bound trading may persist until fresh data or Fed commentary provides direction.
