US Dollar Forecast: Dollar Faces Pressure Ahead of ADP Jobs Data, GBP/USD and EUR/USD

Market Overview

The U.S. Dollar Index (DXY) is trading near 97.62, extending its decline as traders position ahead of critical U.S. economic releases. Sentiment remains cautious with investors balancing softer consumer data against upcoming labor and manufacturing indicators.

Consumer Confidence Weakens

The Conference Board’s Consumer Confidence Index fell sharply to 94.2, well below expectations of 96.0 and the previous 97.8. The decline reflects growing concerns over the economic outlook and spending activity, raising questions about household resilience heading into Q4.

Labor and Manufacturing Reports in Focus

The labor market will be tested on Wednesday with the release of ADP Non-Farm Employment Change, projected at 52K compared to the prior 54K. Meanwhile, the ISM Manufacturing PMI is expected to hold at 49.0, just above contraction territory, while ISM Manufacturing Prices are forecast at 62.7, slightly below last month’s 63.7. These figures will provide clearer signals on growth momentum and inflationary pressures.

Market Outlook

The DXY remains under pressure as weaker consumer sentiment and the potential for softer labor readings weigh on the outlook. A decisive break below support could accelerate dollar losses, while stronger-than-expected data may provide near-term relief. Traders are bracing for volatility as the week’s data unfolds.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is trading near 97.62, slipping below both the 50-EMA (97.86) and 200-EMA (97.74), signaling weakening momentum. The breakdown from the rising channel adds pressure, with immediate support around 97.20–96.83. The RSI at 36 shows bearish momentum, though near oversold conditions suggest sellers may pause.

Price action has printed small-bodied candles, showing indecision after a sharp drop. If DXY stays below 97.90, downside risks dominate, opening a path toward 96.83. A corrective bounce toward 97.90 remains possible but could face strong resistance.

For now, the structure favors sellers, with the bias staying bearish unless buyers reclaim levels above 98.20.

GBP/USD Technical Analysis

GBP/USD is trading around $1.3466, pressing against the 200-EMA at $1.3482, a key resistance level that has capped rallies this week. The 50-EMA at $1.3438 is holding as immediate support, suggesting buyers are gradually building momentum.

The RSI at 62 shows improving strength but remains below overbought levels, leaving room for further upside. A sustained move above $1.3480 could open the path toward $1.3537 and $1.3590, while failure to clear this zone may trigger a pullback to $1.3386.

EUR/USD Technical Forecast

EUR/USD is trading near $1.1760, testing the upper boundary of a descending channel that’s been in place since mid-September. The pair recently reclaimed both the 50-EMA ($1.1733) and 200-EMA ($1.1737), turning them into short-term support. Momentum has improved, with the RSI at 60 showing steady strength without being overbought.

Price is consolidating within a narrow zone between $1.1730 and $1.1770, where a breakout will likely decide the next move. A confirmed close above $1.1770 would signal potential continuation toward $1.1820, while failure to hold support at $1.1730 could drag the pair back toward $1.1680.