The U.S. dollar traded in tight ranges on Friday, closing the session near 99.15 as subdued Good Friday volumes capped volatility. Despite holding steady on the day, the greenback remains under pressure—hovering near 3-year lows—as markets continue to weigh the economic impact of tariff tensions and central bank policy uncertainty.

Trade Optimism and Fed Discontent Collide

President Trump surprised markets with a softer stance on China tariffs, suggesting that not only will he avoid raising duties further, but he may even consider rolling some back—a potential pivot that could soothe market anxiety and support risk sentiment next week.

However, his fresh criticism of Federal Reserve Chair Jerome Powell overshadowed the optimism. Trump stated Powell was “too slow” to act and “can’t be removed quickly enough,” escalating the pressure on the Fed just days after Powell reiterated that the central bank is “monitoring data carefully” before adjusting rates. Markets are now pricing in about 86 basis points of rate cuts for the remainder of 2025.

A drop in U.S. jobless claims to a two-month low underscored a still-resilient labour market, offering some support to the greenback. However, persistent uncertainty around trade policy and renewed pressure on the Fed from Trump have kept traders cautious, leaving the dollar stuck near multi-year lows despite flashes of stability.

Technical Analysis

The 15-minute chart of the US Dollar Index (USDX) shows a choppy consolidation phase after the index found short-term support at 98.904. Despite multiple intraday swings, the price remains range-bound, with resistance near 99.50 and support holding above 98.90, signaling uncertainty among dollar bulls and bears.

Picture: Dollar bulls struggle to regain ground above 99.20, as seen on the VT Markets app

The MACD (12,26,9) shows waning bullish momentum as the histogram contracts toward the zero line. The recent bearish crossover and fading histogram strength imply a possible retest of support, especially as the price lingers below the 30-period moving average, capping any upside thrusts. Traders may want to watch for a break above 99.50 for upside continuation, or a clean breach below 98.90 to confirm renewed bearish control.

A sustained move below 98.90 could reopen downside toward 98.50, while upside resistance holds at 99.50. The dollar is likely to remain range-bound in the short term unless next week’s data or Fed communications provide a directional push.