US 10Y bond yields around 4.30% are supportive for the USD but yields will need to press higher still if the USD is to advance further. It’s not clear that recent data trends can achieve that and the recent uptick in rates risks unwinding quickly if the Fed sounds more dovish than markets expect on Wednesday.

Seasonal trends may be turning against the USD as well. April is typically a soft month for the DXY after a strong Q1. The DXY has returned an average of -0.47% in April over the last 25 years, the second worst month of the year after December.