In the aftermath of the second US Gross Domestic Product (GDP) reading, the US Dollar (USD) finds itself off its intraday high, grappling with the nuanced implications of the unveiled data. While the headline GDP figure exhibited resilience, coming in just 0.1% softer than anticipated, concerns have been ignited by the performance of the Personal Consumption Index (PCI). This uptick in PCI, albeit expected after the fervent Consumer Price Index (CPI) report from two weeks ago, has surpassed expectations, triggering apprehensions among traders regarding the appropriate course of action. All eyes are now firmly fixated on the US Federal Reserve, as speculation swirls regarding the possibility of another rate hike. The Fed’s data-dependent stance has set the stage for a tumultuous journey towards an anticipated first rate cut later this year. The mixed signals emanating from the second reading on US GDP and PCI have heightened anticipation surrounding the impending remarks of three US Federal Reserve members. Market participants are poised to scrutinize every utterance, seeking clarity on whether the recent developments are transient or indicative of a nascent trend necessitating further tightening to sustain the disinflationary momentum. Across the Atlantic, commentary from European Central Bank (ECB) officials, notably ECB’s Peter Kazimir, underscores a contrasting narrative. Kazimir’s remarks regarding the accelerated pace of disinflation and the absence of urgency for a rate cut until June provide a counterpoint to the prevailing sentiments in the US. In tandem with these developments, the Mortgage Bankers Association (MBA) has released disheartening figures, indicating successive declines in the Mortgage Applications Index. This downward trajectory underscores prevailing headwinds in the housing market, warranting close monitoring amidst broader economic uncertainties. Reflecting market sentiment, the CME Group’s FedWatch Tool signals overwhelming expectations for a Fed pause in the upcoming March 20 meeting, with minimal probabilities assigned to a rate cut. However, the divergence between market expectations and emerging economic indicators underscores the potential for volatility ahead. The recent surge in the US Dollar Index, albeit serving to squeeze out USD bears, is tempered by the arduous path to substantive recovery in the wake of the GDP reading and its sub-components. As Chairman Jerome Powell reaffirms the Fed’s commitment to data dependency, the evolving economic landscape hints at the possibility of another hike, much to the chagrin of markets. Technically, the USD faces a key resistance level near the 104.50 level, where the major descending line is located. In case of a breach, the rally will likely gather momentum; however, a rebound will likely indicate that the pullback from the 105 level will extend towards lower levels: