Dollar Weakens, NFP Key Next
The US dollar index (DXY) weakened to around 101.20 during Thursday's European trading session (July 2nd). This weakening occurred as the market began to exercise caution ahead of tonight's release of key US employment data.
Despite falling below 101.50, the short-term outlook for the US dollar remains positive. Technically, the Relative Strength Index (RSI) momentum remains bullish, so the potential for dollar strengthening is not entirely lost.
The market's primary focus is on the US Nonfarm Payrolls (NFP) data for June. Markets expect the US economy to add around 110,000 jobs, while the unemployment rate is projected to remain at 4.3%.
If the NFP data is weaker than expected, the US dollar could potentially come under further pressure against other major currencies. A weak result would lead the market to believe the US economy is slowing, and the likelihood of a Federal Reserve interest rate hike could diminish.
Conversely, if the employment data is stronger than expected, the US dollar could strengthen sharply again. Mitsubishi UFJ Bank analyst Akihiko Yokoo believes the dollar could accelerate its gains if payrolls beat market expectations. Technically, the DXY's nearest resistance is at 101.80, while the lower area to watch is around 101.05. (asd)*
Source: Newsmaker.id
