• The US Dollar is meeting a critical area of support as per DXY. 
• All eyes will be back on key US data and Federal Reserve sentiment ahead of the May meeting. 

The US Dollar index, DXY, is flat at the start of the week but it gained 0.57% on Friday to 101.53, after falling to 100.78, the lowest since last April. 

The US Dollar index firmed off a one-year low on Friday as the Federal Reserve sentiment swung back in favor of the hawks following a combination of Federal Reserve speech and data that were not as weak as some economists had expected.

Core Retail Sales, which correspond most closely with the consumer spending component of Gross Domestic Product, fell 0.3% on the month although the quarter was strong with respect to consumer spending. The greenback also got a boost from Federal Reserve´s Governor Christopher Waller who said on Friday that despite a year of aggressive rate increases, the Fed "hasn't made much progress" in returning inflation to their 2% target and argued rates still need to go up. Meanwhile, Fed funds futures traders are pricing in an 81% probability that the Fed will hike by an additional 25 basis points next month.

Meanwhile, data this week will be eyed and a sure driver for the Greenback, Analysts at TD Securities explained that the S&P PMIs for early April will offer a first comprehensive look at the state of the US economy post-banking turmoil. ´´Note that the March data was not clearly impacted by banking jitters, but perhaps it was too soon to be reflected: both the mfg and services PMIs registered their third consecutive increase then, with the latter advancing further into expansion territory,´´ the analysts said. 

US Dollar technical analysis

The US Dollar has fallen into what could be potentially a strong area of support, albeit on the front side of the bearish trend and therefore, the bias remains bearish. 

However, the US Dollar is making its way towards a 50% mean reversion near 101.80 and the micro trendline resistance. However, should the bulls commit, then the major trendline resistance will be in play for the foreseeable future as follows: 

102.50 comes as a critical resistance in this regard that guards 103.50 to the upside meeting the aforementioned major trend line resistance.