The US Dollar Index (DXY) is experiencing mixed performance on Tuesday, trading around the middle of the 104.00 zone. Earlier in the day, the Greenback found support on stronger services activity and signs that proposed tariffs may be more targeted than feared.

However, uncertainty returned as new headlines from US policymakers tempered the optimism. The evolving rhetoric on inflation and trade created a back-and-forth movement in the DXY, now grappling with nearby resistance. From a technical standpoint, the Moving Average Convergence Divergence (MACD) prints a mild buy signal, while the Relative Strength Index (RSI) is neutral. Despite improving momentum, key Simple Moving Averages (SMAs) suggest the broader setup still leans bearish.
Sentiment weighs on US Dollar after earlier tariff optimism
The DXY trades in a tight range around the mid-104s, struggling to sustain upside after testing higher early Tuesday.
President Trump hinted at exemptions for certain countries from April tariffs, raising hopes of limited global trade fallout.

Trump also reaffirmed upcoming tariffs on aluminum, autos and pharmaceuticals, keeping markets alert for trade-related volatility.
Fed Governor Adriana Kugler flagged fresh inflation pressures, noting worrying trends in select goods categories.
The New York Fed's John Williams said both firms and households are navigating deep uncertainty about economic prospects.
Despite neutral tones from both Fed officials, traders see inflation fears potentially slowing the pace of rate cuts. This Friday's Core PCE data remains the key event with markets closely watching the Fed's preferred inflation indicator.

Source: Fxstreet