Trump's speech shattered peace expectations, and the US dollar saw a temporary rebound.
2026-04-03 19:12:43
On Friday (April 3), during the European trading session, Trump's public remarks this week completely reversed the foreign exchange market's short-term expectations for the US dollar. Prior to this, global investors generally bet that geopolitical conflicts would gradually ease and the situation would cool down, leading many funds to reduce their holdings of the US dollar and increase their allocation to risk assets. However, as the speech released a tough signal, market illusions about a peaceful resolution to the conflict were quickly shattered, and investors immediately turned to defensive asset allocations. As the world's core safe-haven currency, the US dollar received substantial buying support and experienced a rapid upward trend.
With the crucial US non-farm payrolls report due this Friday, market participants were generally unwilling to hold short dollar positions before the weekend. This risk aversion coupled with pre-data caution provided solid support for the dollar. However, after a rapid surge, some funds chose to take profits, causing a slight pullback in the dollar during the day, a normal fluctuation during an upward trend.
Technical Analysis
From a technical perspective, based on the daily oscillator, the US dollar index's medium-term main trend remains upward, but it has entered a short-term consolidation phase. If the price effectively breaks below the 98.880 level, the main trend will turn downward; if it breaks through the recent swing high of 100.643, it means the upward trend will restart, opening up a new round of upward potential.
Meanwhile, the short-term secondary trend is also upward. Once the short-term swing low of 99.298 is breached, the bullish momentum in the market will weaken significantly, and prices may enter a deeper correction.
Furthermore, the trend line at 99.712 also plays a crucial role in controlling the price movement. This trend line has been supporting the current upward trend since the US dollar index hit a low of 95.551 on January 27th. On Wednesday, the US dollar index briefly broke below this trend line, but quickly recovered the following day, highlighting the strong support at this level. Currently, the price is still trading above the trend line, and the medium-term upward structure remains intact.
(US Dollar Index Daily Chart Source: FX678)
The main support levels for the US dollar index are concentrated at two key moving averages: the 200-day moving average at 98.443 and the 50-day moving average at 98.381. The 50-day moving average has now crossed above the 200-day moving average, forming a classic golden cross signal, which will provide strong technical support for the dollar's medium-term upward movement. If it can hold above these moving averages, the rebound is expected to accelerate.
The US dollar index's near-term upside target is the March 31 high of 100.643. If it can firmly hold above this level, it will trigger a strong upward breakout, with the next potential target at 101.977. In the short term, attention should be paid to the consolidation within the 99.70-99.90 range, and further pullbacks due to profit-taking should be watched closely.
As peace expectations dissipate, safe-haven demand supports the dollar's medium-term rally.
Trump's speech clearly signaled to the market that the current geopolitical conflict is unlikely to end in the short term, and more aggressive military action may occur in the coming weeks. The market reacted extremely sensitively to this signal. Market risk appetite quickly shifted to pessimism, with trading funds massively withdrawing from high-risk assets such as stocks and commodities and flowing back to safe-haven assets in the US dollar. In my view, this shift in capital flows is the core logic behind the current rise in the US dollar, and this driving factor has not disappeared due to the short-term correction.
Oil prices, US Treasury yields, and the US dollar all rose in tandem, and the medium-term support logic remains unchanged.
Following Trump's speech, international oil prices surged, triggering a chain reaction in two major markets and providing sustained support for the US dollar. On one hand, high oil prices directly boosted market inflation expectations, forcing the Federal Reserve to postpone its interest rate cut cycle and keeping US Treasury yields high. On the other hand, rising oil prices also exacerbated concerns about a global economic slowdown, further suppressing the performance of risk assets. Both of these market outcomes directly benefited the US dollar. When inflation, yields, and risk aversion all point towards the dollar, the underlying logic for its medium-term rise becomes logical and will not be altered by short-term fluctuations.
With the non-farm payroll data imminent, market sentiment is cautious, leading to short-term fluctuations.
The US non-farm payrolls report, due this Friday, is the key variable influencing the short-term trend of the US dollar. Although the market generally expects only moderate job growth, almost no investors are willing to hold short positions in the dollar before the data release, given its potential to shake up global currency markets.
Holding short positions in the US dollar at the time of data releases coinciding with weekend market closures undoubtedly presents significant uncertainty and risk. Most traders chose to avoid this risk exposure, providing a floor for the dollar. However, some long positions opted to take profits before the data release, causing the dollar to retreat slightly after its initial surge. The overall logic behind the dollar's movement on Thursday was clear: the market prioritized asset safety, risk sentiment cooled across the board, the medium-term strengthening trend of the safe-haven dollar remained unchanged, and the short-term market entered a period of observation and consolidation.
With the crucial US non-farm payrolls report due this Friday, market participants were generally unwilling to hold short dollar positions before the weekend. This risk aversion coupled with pre-data caution provided solid support for the dollar. However, after a rapid surge, some funds chose to take profits, causing a slight pullback in the dollar during the day, a normal fluctuation during an upward trend.
Technical Analysis
From a technical perspective, based on the daily oscillator, the US dollar index's medium-term main trend remains upward, but it has entered a short-term consolidation phase. If the price effectively breaks below the 98.880 level, the main trend will turn downward; if it breaks through the recent swing high of 100.643, it means the upward trend will restart, opening up a new round of upward potential.
Meanwhile, the short-term secondary trend is also upward. Once the short-term swing low of 99.298 is breached, the bullish momentum in the market will weaken significantly, and prices may enter a deeper correction.
Furthermore, the trend line at 99.712 also plays a crucial role in controlling the price movement. This trend line has been supporting the current upward trend since the US dollar index hit a low of 95.551 on January 27th. On Wednesday, the US dollar index briefly broke below this trend line, but quickly recovered the following day, highlighting the strong support at this level. Currently, the price is still trading above the trend line, and the medium-term upward structure remains intact.
(US Dollar Index Daily Chart Source: FX678)
The main support levels for the US dollar index are concentrated at two key moving averages: the 200-day moving average at 98.443 and the 50-day moving average at 98.381. The 50-day moving average has now crossed above the 200-day moving average, forming a classic golden cross signal, which will provide strong technical support for the dollar's medium-term upward movement. If it can hold above these moving averages, the rebound is expected to accelerate.
The US dollar index's near-term upside target is the March 31 high of 100.643. If it can firmly hold above this level, it will trigger a strong upward breakout, with the next potential target at 101.977. In the short term, attention should be paid to the consolidation within the 99.70-99.90 range, and further pullbacks due to profit-taking should be watched closely.
As peace expectations dissipate, safe-haven demand supports the dollar's medium-term rally.
Trump's speech clearly signaled to the market that the current geopolitical conflict is unlikely to end in the short term, and more aggressive military action may occur in the coming weeks. The market reacted extremely sensitively to this signal. Market risk appetite quickly shifted to pessimism, with trading funds massively withdrawing from high-risk assets such as stocks and commodities and flowing back to safe-haven assets in the US dollar. In my view, this shift in capital flows is the core logic behind the current rise in the US dollar, and this driving factor has not disappeared due to the short-term correction.
Oil prices, US Treasury yields, and the US dollar all rose in tandem, and the medium-term support logic remains unchanged.
Following Trump's speech, international oil prices surged, triggering a chain reaction in two major markets and providing sustained support for the US dollar. On one hand, high oil prices directly boosted market inflation expectations, forcing the Federal Reserve to postpone its interest rate cut cycle and keeping US Treasury yields high. On the other hand, rising oil prices also exacerbated concerns about a global economic slowdown, further suppressing the performance of risk assets. Both of these market outcomes directly benefited the US dollar. When inflation, yields, and risk aversion all point towards the dollar, the underlying logic for its medium-term rise becomes logical and will not be altered by short-term fluctuations.
With the non-farm payroll data imminent, market sentiment is cautious, leading to short-term fluctuations.
The US non-farm payrolls report, due this Friday, is the key variable influencing the short-term trend of the US dollar. Although the market generally expects only moderate job growth, almost no investors are willing to hold short positions in the dollar before the data release, given its potential to shake up global currency markets.
Holding short positions in the US dollar at the time of data releases coinciding with weekend market closures undoubtedly presents significant uncertainty and risk. Most traders chose to avoid this risk exposure, providing a floor for the dollar. However, some long positions opted to take profits before the data release, causing the dollar to retreat slightly after its initial surge. The overall logic behind the dollar's movement on Thursday was clear: the market prioritized asset safety, risk sentiment cooled across the board, the medium-term strengthening trend of the safe-haven dollar remained unchanged, and the short-term market entered a period of observation and consolidation.
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