US Dollar tallied weekly gains on hawkish Fed speakers

• Notable monetary divergence between Fed, G10 peers keeps USD afloat.
• Markets await further economic reports for insights into the\xa0US economy\'s health for potential adjustments to Fed expectations.
• Next week’s highlight will be April’s US CPI.

The US Dollar Index (DXY) is currently trading around the 105.35 mark, posting mild gains on Friday near the end of the trading week. The Greenback holds its ground but seems stuck as markets await drivers to continue placing their bets on the next Federal Reserve (Fed) decisions.

The US economy remains on shaky ground, and markets are expecting signs of decelerating inflation, which gives the Fed confidence to start cutting. In the meantime, the bank’s officials remain hawkish.

Daily digest market movers: DXY remains firm as markets digest Fed speaker\'s words

• San Francisco Fed President Mary Daly emphasizes need for prolonged restrictive policy to achieve Fed\'s inflation targets.
• Atlanta Fed President Raphael Bostic hinted at a possible economic deceleration. The exact timeline for rate cuts, however, remains uncertain in his view.
• Overall, Fed remains careful concerning initiation of easing policy. Despite a few Fed officials expecting a single rate cut this year, majority of market predictions foresee rate cuts starting in September. This conservative Fed strategy starkly opposes Powell\'s dovish indications from last week.
• Outcome of April’s Consumer Price Index (CPI) will be key for markets to continue shaping their expectations.

DXY technical analysis: DXY showcases mixed sentiment with both bulls and bears struggling for strength

The indicators on the daily chart are radiating a rather mixed picture. On one hand, the Relative Strength Index (RSI) plots a positive slope but remains in negative territory. This indicates that while the selling pressure is currently stronger, buying momentum is slowly creeping up, suggesting a potential shift in the near future.

Similarly, the Moving Average Convergence Divergence (MACD) sticks with flat red bars, indicating no strong impulse from either side.

The Simple Moving Averages (SMAs) also carry a mixed signal. Despite the DXY falling below the 20-day SMA due to bearish interference, it remains above both the 100-day and 200-day SMAs. This scenario indicates that while bears have been successful in shaping the short-term trajectory, bulls retain control over the medium to long-term trend.

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