Insights 
VT 
The US dollar has begun to regain some composure after President Trump finalised a new trade agreement with Japan. The deal introduces a 15% tariff on Japanese imports, significantly softer than the 25% rate threatened in a letter earlier this week.
This less aggressive stance has brought some calm to currency markets, with the US Dollar Index (USDX) inching up 0.1% to 97.488 at the time of writing.
The agreement may also pave the way for renewed capital inflows. Japan’s commitment to invest $550 billion into the US economy adds a layer of medium- to long-term support for the greenback, given the backdrop of global economic uncertainty.
Further negotiations are progressing, including revised trade arrangements with the Philippines and an emerging pact with Indonesia.
Technical Analysis
The Dollar Index extended its intraday decline before finding support at 97.009, a level where buyers began stepping in to halt the slide. A glance at the 15-minute chart shows a sluggish, sideways grind since that bounce, with momentum still looking uninspiring.
The MACD has crossed above the signal line, but with minimal volume and a flat histogram, signalling a weak recovery phase rather than a confirmed reversal.
The moving averages are beginning to converge, and price is attempting to reclaim the 97.15 region, where 30-MA resistance is currently capping upward movement.
Bulls will need a decisive break above 97.27 to shift the intraday structure into bullish territory. Until then, caution dominates.
Powell Remains A Talking Point
Although trade tensions have cooled, political scrutiny of the Federal Reserve remains in focus. US Treasury Secretary Scott Bessent told Fox Business that Fed Chair Jerome Powell should retain his position, despite previously advocating for a review of central bank operations.
His remarks underscore the importance of policy credibility in the currency space. With the Fed under the microscope, any inconsistencies in its forward guidance or unexpectedly dovish policy shifts could renew pressure on the dollar.
Tentative Outlook
At present, support at the 97.00 level appears to be holding for now. Should macroeconomic conditions stabilise and data releases remain steady, USDX may have room to edge higher toward the 97.50–97.60 range.
Nonetheless, traders should stay vigilant. Any resurgence in political tension surrounding the Fed or renewed hawkish rhetoric on trade could limit upside potential and send the dollar back toward support levels.
For now, the recovery remains fragile, more a pause than a full-fledged reversal.
