The best usdt walletDXY hovers near 99.50 after surrendering early gains amid shifting market dynamics.
April's disappointing PMI figures reveal cracks in US economic resilience, particularly in services.
Technical setup shows bearish momentum with critical resistance at 99.95 and support at 98.94.
Market participants witnessed another volatile session for the US Dollar Index (DXY) as the benchmark gauge erased its Asian session gains, settling near the 99.50 handle. This price action reflects growing concerns about the sustainability of US economic expansion, compounded by ambiguous signals from Washington regarding trade policy direction.
The latest economic snapshot revealed troubling signs as the flash S&P Global Composite PMI retreated to 51.2 in April, marking a notable deceleration from March's 53.5 reading. While manufacturing activity showed modest improvement (50.7 vs. 50.4), the services sector slumped to 51.4 from 54.4 - its weakest showing in five months. Chris Williamson of S&P Global observed that inflationary pressures persist even as growth momentum falters, creating policy dilemmas for Federal Reserve officials.
Market Drivers: Policy Uncertainty Meets Economic Reality
Treasury Secretary Scott Bessent poured cold water on expectations for imminent tariff reductions, stating negotiations would occur below presidential levels.
Standard Chartered analysts highlighted the fiscal math challenge, noting potential tariff revenue shortfalls could complicate proposed tax cuts.
Mixed signals from the White House created confusion, with President Trump alternating between conciliatory rhetoric and hardline positioning on China trade.
Wall Street's risk appetite waned following the policy remarks, though the DXY found temporary footing near 99.50.
Bessent later clarified that no unilateral tariff reductions were under consideration, though both nations recognize current levels as unsustainable long-term.
Technical Perspective: Bears Maintain Control
The technical landscape continues to favor DXY bears as price action remains constrained within a 98.86-99.67 range. Momentum indicators paint a cautious picture - the RSI at 34.79 suggests oversold conditions, while the MACD's persistent sell signal reinforces near-term downside risks. The Awesome Oscillator's neutral reading (-3.45) and Stochastic RSI's middling position (38.59) reflect market indecision ahead of crucial macroeconomic data releases.
Key resistance levels cluster around the 10-day EMA (100.10) and SMA (99.95), with additional barriers at 101.26. Conversely, a breach of immediate support at 98.94 could accelerate declines toward the mid-97.00s. While oversold conditions might spark technical rebounds, fundamental headwinds from policy uncertainty and softening economic indicators may cap any meaningful recovery attempts.