The U.S. Dollar Index steadied near the 104.20 area on Tuesday. It showed little direction after a series of soft data releases. A weaker-than-expected ISM Manufacturing PMI print, a decline in Job Openings, and cautious commentary painted a murky outlook for the Greenback.
Despite modest gains, the technical backdrop remains fragile. Traders look ahead to further macro drivers later this week. The U.S. 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. This signals a faster pace of job cuts. Meanwhile, the Prices Paid Index surged to 69.4 from 62.4. This points to renewed inflationary pressure amid tariff-linked supply issues.
The Chair of ISM’s Business Survey Committee said demand remains confusing for businesses. Destaffing and production cuts are ongoing. U.S. JOLTS Job Openings dropped to 7.56 million in February, below expectations.
This confirms labor market softening. Total hires and separations remained 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 of nearly 4.4% in 2025.
Currency markets appear less reactive to tariffs.
The Dollar Index steadies amid mixed signals
They are 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. The U.S. Dollar Index is posting modest gains on Tuesday.
However, the broader technical picture remains bearish. The Moving Average Convergence Divergence (MACD) still signals a potential bullish crossover, yet longer-term indicators continue to flash sell signals.
The Relative Strength Index (RSI) at 76.92, alongside stochastic readings, points to overbought conditions. The Awesome Oscillator remains neutral. The 20-day SMA offers mild bullish support.
Resistance is located at 104.435, 104.841, and 104.847. Support lies near 104.169, 104.165, and 104.128. Traders remain cautious as economic data continues to show signs of fragility.
Upcoming reports could further influence the direction of the U.S. Dollar.
Photo by; Lukasz Radziejewski on Unsplash