US Dollar Index bounces from 97.70 on rising odds of a delay in Russia-Ukraine truce

• Rising odds of a delay in a ceasefire between Moscow and Kyiv may underpin the DXY.
• Seven out of eight members favored a 25 basis point (bps) rate hike in FOMC.
• A bearish crossover by 20 and 200-period EMAs is indicating more pain ahead.

The US dollar index (DXY) has attracted some bids around 97.73 after a four-day losing streak. The index has eased around 1.5% this week. The renewed fears of an escalation in geopolitical tensions between Russia and Ukraine have brought a minor pause in the demand for risk-perceived assets, which eventually has resulted in a minor pullback for the DXY.

Earlier, the statement from Ukrainian officials that peace talks with Moscow are progressing boosted the sentiment in the market. However, Kremlin has reported that news pointing to progress in Ukraine-Russia peace talks was “wrong,” as per Reuters. This has brought minor ease in the optimism and investor are waiting for fresh developments from Ukraine’s land for further guidance.

Fed’s monetary policy

The DXY is still facing the hangover of the monetary policy in which a gradual approach adopted by the Federal Reserve (Fed)’s Chair and his colleagues has brought an intensified selling in the dollar counter. Seven out of eight members favored a 25 basis point (bps) rate hike while only one member backed the 50 bps elevation.

Major events on Friday: Existing Home Sales and Federal Reserve Bank Gov. Michelle Bowman’s speech.

Eminent issues on the back boiler: Russia-Ukraine peace talks, monetary policy from Bank of Japan (BOJ).

DXY Technical Analysis

On an hourly scale, the DXY has sensed support near March 10 low at 97.72. The 20-period and 200-period Exponential Moving Averages (EMA) have given a bearish crossover at 98.47, which adds to the downside filters.

DXY hourly chart