The US Dollar is back under pressure, giving up much of its post-FOMC rebound. Despite Fed Chair Powell's hawkish stance at the January meeting, markets are reassessing the outlook as macro conditions shift.

A string of soft labor indicators, including rising Challenger layoffs and weaker ADP figures, has started to undermine confidence in the Dollar's underlying strength. As concerns around growth and policy uncertainty resurfaces, Gold is once again attracting defensive flows, reclaiming its role as a hedge against currency erosion and policy risk.

The US Dollar Index has slipped below the 97.00 handle, failing to sustain its earlier breakout above 97.50.

Previously, resilient data supported the "Hawkish Hold" narrative, keeping the Dollar bid. That narrative is now fading. Markets are increasingly pricing in the risk that the Fed may be forced to ease sooner if labour market weakness persists, despite Powell's guidance that rate cuts are unlikely before June.

CME FedWatch data now reflects a 32% probability of an April rate cut, up from 23.6% just two weeks ago, highlighting a meaningful shift in expectations.

At the same time, concerns around long-term Dollar credibility are resurfacing. Recent comments from Fed President Bostic noting emerging doubts about confidence in the US Dollar have added to bearish sentiment.

From a technical perspective, the rejection above 97.50 signals that the recent rebound was corrective rather than the start of a sustained reversal. The 97.00 level is now critical. Sustained trading below this zone would reinforce downside risk toward 96.00.

To stabilize sentiment, bulls need to reclaim 97.60. Until that happens, rallies are likely to be met with selling interest. Near-term volatility may remain subdued as markets await further macro confirmation.

After consolidating near the $5,000 level, Gold has resumed its advance and is now trading around $5,050.

Dollar weakness remains the primary tailwind, while lingering equity volatility and political uncertainty in Japan have encouraged capital rotation back into safe-haven assets.

Technically, Gold has formed a higher low near $4,700, signalling renewed buying interest following last week's sharp correction. A period of consolidation remains healthy after the recent volatility spike.

Immediate resistance stands at $5,100. A clean break above this level would expose the $5,200 - $5,250 liquidity zone. On the downside, $5,000 remains the key structural support. A failure to hold this level would likely extend the consolidation phase rather than signal trend exhaustion.

US Retail Sales

A critical read on consumer resilience. A weak print would reinforce growth concerns and add pressure on the Dollar.

Fed Speakers (Hammack, Logan)

Markets will be alert for any response to aggressive rate-cut pricing. Growth-focused or dovish commentary would further weigh on the Dollar.

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