US Dollar Forecast: Traders Eye ADP Jobs Report and PMI for Fed Rate Clues – GBP/USD and EUR/USD

Market Overview

The U.S. Dollar Index (DXY) is trading around $99.78, slightly lower after touching $99.91 earlier in the session. The greenback’s strength remains underpinned by resilient economic data and cautious remarks from Federal Reserve officials, which have kept investors uncertain about the timing of the next rate cut.

Monday Recap: Weak U.S. Manufacturing Data

Yesterday’s ISM Manufacturing PMI came in at 48.7, below both the 49.4 forecast and 49.1 previous, signaling a contraction in the industrial sector. However, ISM Manufacturing Prices rose sharply to 58.0 from 61.9, suggesting that inflationary pressures persist despite slowing growth.

Meanwhile, Wards Total Vehicle Sales fell to 15.3M, underscoring softening consumer demand.

Tuesday Outlook: Central Bank Speeches and Optimism Data

Today’s calendar includes several key speeches that could influence market direction. ECB President Lagarde is scheduled to speak twice, followed by FOMC Member Bowman and MPC Member Breeden, whose comments may provide further clarity on future policy shifts.

The RCM/TIPP Economic Optimism Index for the U.S. is forecast at 48.1, only slightly below 48.3 previously, suggesting muted confidence among consumers.

Overall, the dollar’s near-term strength appears steady as traders brace for a busy midweek session featuring ADP employment data and ISM Services PMI, both likely to shape expectations for December’s Fed decision.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is consolidating near 99.78, pausing after testing the 100.05 resistance zone. Price remains above both the 50 EMA (99.55) and 200 EMA (99.01), showing underlying bullish structure.

The RSI at 53 indicates neutral momentum, though a slight dip suggests cooling demand after the recent rally. Immediate support lies around 99.41, followed by 99.14, where buyers could re-emerge if pullbacks deepen.

A decisive close above 100.05 would open the door for a retest of 100.35–100.63, while a break below 99.40 could shift short-term sentiment back toward 98.90 support.

GBP/USD Technical Analysis

The GBP/USD pair is hovering near $1.3136, stabilizing after a sharp decline that tested key support around $1.3094. Price action remains capped under the 50 EMA ($1.3169) and 200 EMA ($1.3285), reflecting persistent bearish control.

The RSI at 47 shows mild recovery but stays below the neutral zone, suggesting limited upside momentum. A breakout above $1.3164 could open the door to $1.3231, while sustained weakness below $1.3090 may trigger another slide toward $1.3034 or even $1.2976.

EUR/USD Technical Forecast

The EUR/USD pair is consolidating around $1.1528, struggling to rebound after last week’s sharp decline. The pair remains capped under the descending trendline from October highs near $1.1669, keeping the broader outlook bearish. Both the 50 EMA ($1.1558) and 200 EMA ($1.1612) are sloping downward, reinforcing selling pressure.

The RSI near 46 suggests modest recovery potential, though the broader bias stays weak unless the euro breaks above $1.1546–$1.1581 resistance. Immediate support rests at $1.1505, followed by $1.1477 and $1.1440.

A break below these could accelerate downside momentum, while a daily close above $1.1620 would signal a potential short-term reversal.