US Dollar reverses sharply after Trump’s U-turn statement on de-escalation

The US dollar recouped some of it’s losses against other major assets as safe haven demand for the green back increased on Trump’s pledge to keep on hitting Iran . Earlier in the week, The US President, Donald Trump in a statement said the US would be out of Iran in 2 or 3 weeks, but has now backtracked on his statement, triggering risk-off trades across the markets. The Dollar index (DXY) as of writing has appreciated over +0.65% and is back above the 100.00 price level.

On the Data front, the US ADP Non-Farm employment change came out better-than-expected at 62k while core retail sales and retails sales report both beat market forecasts. In addition to that the ISM manufacturing report for the month of March showed economic activity expanded for the third consecutive month. This latest reports has shown that the US economy has remained resilient despite the economic uncertainty caused by the escalation between US and Iran.

Later today, the US dollar strength will be tested by the upcoming unemployment claims report which will be followed up by the  NFP report scheduled for release on Good Friday (April 3, 2026). It is expected that the labour market could see an additional 65,000 jobs added for the month of March, while unemployment rate is expected to remain unchanged at 4.4%.

Technical outlook

The Dollar index might have come to the end of it’s correction phase as the current price action shows the price has reversed higher aggressively after hitting the ascending trendline.

For a bullish scenario, the current levels around 99.00 and 99.30 needs to hold for continuation of its uptrend. Failure to keep the price above these levels could indicate the market is primed for a full reversal with support level around 98.60 getting exposed.

For a bearish scenario,the resistance zone around 100.50 remains strong due to multiple price rejections previously. As far as the price remains below this level, sellers will aim to test any support level in sight. However, should the buyers revisit this level and break it, then the next resistance levels for possible shorts will be at 101.800.