- The DXY is quoted near the 104.20 zone after a mixed reaction to the PMI data and job offers.
- The manufacturing activity contracts and the hiring slows down, maintaining the risks of stagflation at stake.
- The resistance is observed around 104.84 with the support grouping about 104.13.
The American dollar index (DXY), which measures the value of the US dollar in front of a foreign exchange basket, trades near the 104.20 area on Tuesday, showing little directional bias after a series of publications of weak economic data from the US Fed paint an uncertain panorama for the dollar. Despite modest profits, the technical background is still fragile while the operators look forward to more macroeconomic drivers later this week.
What moves the market today: the US dollar is stabilized while the cracks are extended in the data
- The USM manufacturing PMI of the United States fell to 49 in March from 50.3 in February, below the 49.5 forecast.
- The employment index of the sector fell to 44.7, its lowest level since last July, pointing out a faster pace of employment cuts.
- The paid price index shot at 69.4 from 62.4, pointing to a renewed inflationary pressure amid supply problems linked to tariffs.
- The president of the ISM Business Survey Committee said that the demand is still confusing for companies with current production dismissals and cuts.
- The US Jolts employment offers fell to 7.56 million in February, below expectations and confirming labor market cooling.
- Total hiring and separations were practically unchanged at 5.4 million and 5.3 million, respectively.
- The president of the Fed, Barkin, warned that current data is difficult to interpret, calling it “wrapped in a dense fog.”
- Despite the decrease in employment offers, the Fed updated SEP projects a stable unemployment rate about 4.4% in 2025.
- The currency markets seem less reactive to tariffs, focusing more on signals of stagnation or economic contraction.
- Operators are increasingly cautious before the non -agricultural payroll (NFP) report on Friday.
- CME data show low probabilities of a rate cut in May, but moderate pressure could increase with more data in the data.
- The DXY continues to oscillate between 104.00 and 105.00 while the market seeks conviction.
- The feeling of risk remains fragile with cautious operators in the face of a possible additional fall in actions and bonds.
Technical analysis
The US dollar index is registering modest profits on Tuesday, but the broader technical panorama remains bassist. The indicator of convergence/divergence of mobile socks (MACD) still indicates a possible bullish crossing, however, the longer term indicators such as the simple mobile stockings (SMA) of 100 days and 200 days, as well as the 30 -day exponential mobile (EMA) average, continue to show signals of sale.
The relative force index (RSI) in 76.92, together with stochastic readings, points to overcompra conditions, while the amazing oscillator remains neutral. The 20 -day SMA offers a slight bullish support. The resistance is located at 104,435, 104,841 and 104,847, while the support is about 104,169, 104,165 and 104,128.
FAQS EMPLOYMENT
The conditions of the labor market are a key element to evaluate the health of an economy and, therefore, a key factor for the assessment of currencies. A high level of employment, or a low level of unemployment, has positive implications for consumer spending and, therefore, for economic growth, which drives the value of the local currency. On the other hand, a very adjusted labor market – a situation in which there is a shortage of workers to cover vacancies – can also have implications in inflation levels and, therefore, in monetary policy, since a low labor supply and high demand lead to higher wages.
The rhythm to which salaries grow in an economy is key to political leaders. A high salary growth means that households have more money to spend, which usually translates into increases in consumer goods. Unlike other more volatile inflation sources, such as energy prices, salary growth is considered a key component of the underlying and persistent inflation, since it is unlikely that salary increases will fall apart. Central banks around the world pay close attention to salary growth data when deciding their monetary policy.
The weight that each central bank assigns to the conditions of the labor market depends on its objectives. Some central banks have explicitly related mandates to the labor market beyond controlling inflation levels. The United States Federal Reserve (Fed), for example, has the double mandate to promote maximum employment and stable prices. Meanwhile, the only mandate of the European Central Bank (ECB) is to maintain inflation under control. Even so, and despite the mandates they have, labor market conditions are an important factor for the authorities given its importance as an indicator of the health of the economy and its direct relationship with inflation.
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.
