US Dollar Price Forecast: Can NFP Data Reverse Downtrend? – GBP/USD and EUR/USD

Market Overview

The US Dollar Index (DXY) hovered near $96.80 during Thursday’s Asian session, weighed down by weaker labour data and growing speculation of a Federal Reserve rate cut. Traders are now awaiting the June Nonfarm Payrolls (NFP) report for further direction.

ADP Job Losses Spark Renewed Dollar Weakness

Sentiment turned bearish after the ADP Employment Report showed a surprise drop of 33,000 private payrolls in June—the first decline in over two years. This follows a downward revision to 29,000 jobs in May and sharply missed the forecast of a 95,000 increase.

The data added to concerns over labour market softness and raised expectations of Fed policy easing.

Fed’s Dovish Tone Amplifies Rate Cut Expectations

Comments from Fed Chair Jerome Powell added pressure to the dollar. Powell noted that a rate cut remains on the table, with future decisions guided by incoming economic data.

Markets now price in a growing probability of policy easing at the July 30–31 FOMC meeting.

NFP Data Could Prove Decisive

Economists expect a 110,000 job gain in June, with unemployment rising to 4.3% and wage growth steady at 3.9%. A soft print would likely cement expectations for a cut, while a strong report could offer short-term relief to the USD.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index (DXY) is trading around $96.76, caught within a descending channel and struggling to regain bullish momentum. Despite a modest bounce from the $96.10 support level, the price remains capped by the 50-period EMA at $96.98 and the upper channel boundary, both of which act as short-term resistance.

A failure to close above $97.08 would reinforce bearish pressure, especially with the 200-period EMA at $97.85 looming as a more significant obstacle.

On the downside, the following primary support levels lie at $96.37 and $96.10, followed by the June low near $95.83. Until DXY clears the trendline resistance, the broader trend remains tilted to the downside.

GBP/USD Technical Analysis

GBP/USD is trading near $1.3670, recovering from Monday’s sell-off and bouncing off the ascending trendline near $1.3600. The pair has reclaimed the 200-period EMA at $1.3607 and is now testing the 50-period EMA, which is located around $1.3683—a key resistance level.

Price action shows a bullish engulfing candle off trendline support, suggesting renewed buying interest. If the pair clears $1.3687 convincingly, upside targets include $1.3780 and $1.3827. On the flip side, a failure to hold above $1.3600 could lead to a drop toward $1.3562 and $1.3508.

Momentum favours buyers as long as the price stays above the ascending trendline and the EMAs. A breakout above $1.3687 would confirm short-term bullish continuation.

EUR/USD Technical Forecast

EUR/USD is trading near $1.1807, continuing its steady ascent within a well-defined ascending channel. Price action remains supported by the 50-period EMA at $1.1760, while the 200-period EMA below at $1.1622 reinforces the longer-term uptrend.

The pair is eyeing a breakout above short-term resistance at $1.1828, which could pave the way for a move toward $1.1869 and the upper boundary of the channel at $1.1906. On the downside, support is seen at $1.1755, a key pivot zone that aligns with the channel’s lower trendline.

As long as EUR/USD holds above $1.1755, the bullish structure remains intact, with momentum favouring further upside into Friday’s NFP volatility.