US Dollar (USD) drifted higher on tariff headlines. Trump just announced plans to impose 25% tariffs on steel and aluminium imports (no mention of effective date) and last Fri, he spoke about introducing reciprocal tariffs this week. DXY was last seen at 108.12 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note. 

Bearish momentum on daily chart intact

"Not forgetting that China tariffs on US goods come into effect today, we cannot rule out further deterioration in US-China trade tensions. US data was mixed last Fri – labour market report was on net positive though there are signs of it softening slowly while University of Michigan sentiment fell but inflation expectations rose." 

"Bearish momentum on daily chart intact while RSI continued to rise. Rebound risk not ruled out. Resistance at 108.40 (21 DMA), 110.00/20 levels (previous high). Support at 107.80 (50 DMA, 23.6% fibo retracement of Oct low to Jan high), 107 levels."

"In terms of US data/event this week, CPI (Wed), Powell’s semi-annual testimony to lawmakers (Tue, Wed), PPI (Thu), retail sales and IP (Fri) will be closely watched. Markets are pricing about cumulative 36bps of cut for this year with the next cut only fully priced in around Sep-2025 meeting. Softer US data (i.e. CPI) can lead to dovish repricing, and this can weigh on USD. But the recent headline on reciprocal tariffs suggests that risk-off trades may take precedence."