The US Dollar Index shows some weakness ahead of FOMC Minutes from the January meeting with a slight decline to 104.00.

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• The US Dollar Index shows some weakness ahead of FOMC Minutes from the January meeting with a slight decline to 104.00.
• The Fed’s intention to keep rates untouched may fuel further gains for the US Dollar.

The US Dollar Index (DXY) experienced a slight setback, resting at 104.00 in Wednesday’s session.

The US economy, backed by robust data, shows resilience, reflected in the strength of the Greenback in 2024. Meanwhile, the Federal Reserve (Fed) maintains a hawkish stance, dismissive of near-term rate cuts and keen on keeping rates at restrictive levels. The market aligns progressively with this view, reinforcing expectations of a delayed easing cycle.

The indicators on the daily chart reflect a balance between buying and selling pressure. The Relative Strength Index (RSI) is in positive territory, but its negative slope suggests that buying momentum is losing steam. The Moving Average Convergence Divergence (MACD), with its decreasing green bars, implies that any bullish momentum is weakening and could potentially flip into a bearish bias.

Furthermore, the positioning of the index compared with its Simple Moving Averages (SMAs) provides an interesting perspective. Despite the bearish pressure, bulls have managed to keep the DXY above the 20-day and 200-day SMAs. This suggests that buyers continue to wield some strength in the broader time horizon.

However, the Dollar Index being below the 100-day SMA may hint at intermediate barriers for bullish movements. Hence, while the broader trend might still be inclined toward buyers, the short-term outlook presents a battle for control between bulls and bears.

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