USDInd plunges amid EU shifts & US tariffs

• USD Index fell 3.26% in 2025, 2.54% in March
   
• Trump’s tariff policies fuel USD decline
   
• EU’s $840B defense plan impacts Euro, USD
   
• USDInd broke falling wedge, holds 200-day SMA
   
• Key levels: support 103.465, resistance 107.023

The USD Index has undeniably faced a significant decline of 3.26% in 2025.
 

This year, the USD Index has clearly shown a troubling pattern of lower highs and lower lows, punctuated by an alarming drop of 2.54% in March.

This decline can be directly linked to the erratic and unpredictable nature of President Trump's tariff policies.
 

U.S. Commerce Secretary Howard Lutnick has confirmed that President Trump is poised to engage in negotiations with Canada and Mexico, with major announcements expected on Wednesday, March 5th.

Additionally, the dramatic shift in the European Union’s defense strategy is crucial to understanding the USD Index’s drop. The ambitious Rearm Europe Plan aims to mobilize around $840 billion to significantly bolster military spending across the EU.

In Germany, the new government's intention to create a massive $528 billion defense-focused infrastructure fund is already making waves.

It’s essential to underscore that the USD Index measures the value of the U.S. dollar against a basket of six major currencies, with the Euro constituting a substantial 57.6% of the index.

The unfolding situation will have profound implications for the USD Index and the wider economic landscape.

From a Technical Viewpoint …

The USD Index has decisively broken out of a falling wedge pattern as of yesterday, March 4th, and is now firmly supported by its 200-day simple moving average (SMA).

Traders and investors who anticipate a further decline in the index must focus on the following critical support levels:

• 105.055 – The 200-day simple moving average
   
• 104.530 –  A major price level that should not be overlooked
   
• 103.465 – A significant price point

On the other hand, USD Ind bulls(those looking to see the index rally) should prepare for resistance at the following levels, which are crucial for potential upside movement:

• 105.864 – A key price point that represents the former support line of the falling wedge, now transformed into strong resistance
   
• 107.023 – The 21-day simple moving average, a vital threshold in the short term