US Dollar consolidates gains following JOLTS

• Tuesday’s highlight was the US Bureau of Labor Statistics reporting on strong JOLTs Job Openings figures for February.
• Markets await additional data to guide easing cycle expectations, widely expected to commence in June. 
• Events on the horizon this week include Nonfarm Payrolls, Average Hourly Earnings, and Unemployment rate.

The US Dollar Index (DXY) trades at 104.95 with mild losses. The Federal Reserve (Fed) and economic data are giving signals of a solid US economy, which made markets back off on being fully confident of a June rate cut. Labor data this week will continue modeling those expectations.

The US economy remains resilient as the Federal Reserve adopts a cautious approach under the leadership of Powell. Despite forecasts indicating higher inflation, the Fed is avoiding drastic reactions to temporary price spikes. The potential beginning of a monetary easing phase in June is contingent upon future economic data. Several Fed speakers will be on the wires on Tuesday.

Daily digest market movers: DXY loses ground despite strong labor data

• The Bureau of Labor Statistics (BLS) in the US published the Job Openings and Labor Turnover Survey (JOLTS) for February, which showed 8.75M job openings.
• This figure surpassed January's adjusted count of 8.74M and overtook the market expectation of 8.74M. 
• As for now, the market foresees a 63% probability of the first 25 bps rate cut in June, which is still contingent on incoming data.
• US Treasury bond yields are mixed on Tuesday with the 2-year yield at 4.70%, indicating slight downward movement. In contrast, 5 and 10-year yields at 4.34% and 4.36%, respectively, show minor increases.
• Nonfarm Payrolls, Average Hourly Earnings, and Unemployment Rate data will dictate the pace of expectations and the US Dollar for the short term.

DXY technical analysis: DXY bulls take a breather but retain control

On the daily chart, the Relative Strength Index (RSI) is on a negative slope, although still in positive territory, implying a possible weakening of buying momentum. This may be a hint that the bulls are taking a breather at this point after driving the index to its highest level since mid-February. The Moving Average Convergence Divergence (MACD) shows decreasing green bars, further indicating that the bullish momentum seems to be losing steam.

Despite showing a negative outlook in the short term, the pair is operating above its 20, 100, and 200-day Simple Moving Averages (SMAs). This suggests that the overall trend remains predominantly bullish.