What to look for around USD

The index remains under pressure and keeps the trade near the 103.00 zone ahead of the key FOMC event later in the European evening.

In the meantime, diminishing banking jitters continues to lend support to the risk complex and keeps the price action around the buck depressed for the time being, or at least until the interest rate decision by the Fed.

So far, speculation on a potential Fed’s pivot in the short-term horizon should weigh on the dollar, although the still elevated inflation, the resilience of the US economy and the hawkish narrative from Fed speakers is seen playing against that view.

Key events in the US this week: MBA Mortgage Applications, FOMC Interest Rate Decision, Powell press conference (Wednesday) – Initial Jobless Claims, Chicago Fed National Activity Index, New Home Sales (Thursday) – Durable Goods Orders, Advanced PMIs (Friday).

Eminent issues on the back boiler: Rising conviction of a soft landing of the US economy. Persistent narrative for a Fed’s tighter-for-longer stance. Terminal rates near 5.5%? Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.

USD Index relevant levels

Now, the index is retreating 0.06% at 103.15 and the breach of 103.00 (monthly low March 21) would open the door to 102.58 (weekly low February 14) and finally 100.82 (2023 low February 2). On the other hand, the next resistance emerges at 105.88 (2023 high March 8) seconded by 106.61 (200-day SMA) and then 107.19 (weekly high November 30 2022).