US Dollar Forecast: DXY Pressured with Bears Focused on Jobs Report

Dollar Slips as Yields Cool — 98.307 Is the Line Traders Care About

The U.S. Dollar Index is trading lower into Monday’s mid-session, and the pressure feels persistent even if the pace is slow. Sellers aren’t forcing the issue, but buyers aren’t stepping up either. The dollar is bleeding lower, not bouncing, as traders position cautiously ahead of a busy U.S. data week.

Price is now straddling a key 50% retracement at 98.307, a level that’s starting to look like a short-term line in the sand. The broader trend is already pointing down, so this area matters. Hold it, and the market may churn. Lose it, and downside momentum could pick up quickly.

At 17:56 GMT, the DXY is trading 98.343, down 0.050 or -0.05%.

Falling Yields Sap Dollar Appeal Ahead of Heavy Data Risk

Treasury yields are sliding across the curve, and that’s keeping the dollar under steady pressure. The 10-year yield is down more than three basis points near 4.16%, with the 2-year and 30-year also moving lower. Traders are trimming exposure rather than betting on a rebound.

Lower yields matter because they reduce the relative return on U.S. assets. When those returns slip, the dollar loses one of its key supports. With investors staring at a slate of delayed economic releases, there’s little urgency to rebuild long dollar positions.

This week brings November payrolls and the unemployment rate, followed by retail sales and Thursday’s CPI report. The data is important, but traders know much of it is backward-looking and distorted by the government shutdown. That uncertainty is keeping conviction low and flows defensive.

Fed Tone Caps Rate Expectations, Keeps Pressure on the Greenback

The Federal Reserve isn’t providing much lift. Last week’s rate cut came with a clear message from Chair Powell: policymakers aren’t in a hurry to cut again while they wait for cleaner signals from the data. That stance limits upside for yields and, by extension, the dollar.

Political chatter around potential Fed leadership changes adds noise, but it’s not driving price. What matters is that the market sees patience, not urgency, from the Fed. That leaves the dollar exposed if incoming data disappoints.

Charts Stay Bearish as Key Averages Cap Rallies

Technically, the picture remains weak. The DXY is trading below both the 200-day moving average at 99.318 and the 50-day moving average at 99.242, and both are acting as resistance. Rallies into that zone are likely to attract sellers.

The 200-day moving average is also positioned to cross to the weak side of the 50-day, a setup that would reinforce the bearish trend and could draw in fresh momentum sellers.

On the downside, a break below 98.307 puts focus on the 61.8% retracement at 97.814, with 96.218 sitting below that.

Bottom Line: Quiet Trade, but Downside Risk Is Building

The dollar isn’t collapsing — yet. But the risk is skewed lower. With yields drifting down and the Fed on hold, the DXY doesn’t need good news to fall. A soft jobs report or a weaker CPI print could be the trigger that turns this subdued trade into a sharper slide. If 98.307 gives way on bearish data, sellers are likely to press, and the move lower could come fast.

More Information in our Economic Calendar.