US Dollar Forecast: ADP Jobs Data Lifts DXY, GBP/USD and EUR/USD Outlook

Market Overview

The US Dollar Index (DXY) remains firm at 107.744, up 0.11%, as traders assess a mix of economic indicators shaping market sentiment. The ADP Non-Farm Employment Change surprised to the upside at 183K, exceeding the 148K forecast, reinforcing strength in the labor market.

However, the ISM Services PMI fell to 52.8, missing expectations of 54.2, signaling a slowdown in the services sector, which accounts for a significant portion of the US economy. Additionally, the US trade deficit widened to -$98.4B, exceeding the projected -$96.5B, reflecting continued external imbalances.

With the Federal Reserve expected to cut rates twice in 2025, traders remain cautious ahead of Thursday’s unemployment claims report and Friday’s Nonfarm Payrolls data, both of which could provide further insight into the Fed’s policy path.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at 107.744, up 0.11%, as it holds above the pivot point at 107.712. This level remains key in determining the next move. Immediate resistance is at 107.965, with a stronger hurdle at 108.365. A breakout above these levels could reinforce bullish momentum, especially if economic data supports further gains in the dollar.

On the downside, 107.290 serves as immediate support, followed by 106.979, where buyers may step in. The 50-day EMA at 108.066 and 200-day EMA at 108.247 suggest that the dollar is trading below key moving averages, signaling potential resistance ahead.

A sustained move above 107.712 could push the index higher, while a drop below this level might trigger a sharper correction.

GBP/USD Technical Analysis

GBP/USD is trading at $1.24839, down 0.16%, as the pair struggles to hold above its pivot point at $1.24642. Despite minor losses, the broader trend remains cautiously bullish as long as the price stays above this level. Immediate resistance is at $1.25376, followed by a stronger ceiling at $1.26021, which could trigger further upside momentum if breached.

On the downside, $1.23957 serves as key support, with $1.23230 as the next major level. The 50-day EMA at $1.24546 aligns with the pivot, reinforcing short-term support, while the 200-day EMA at $1.24062 suggests a stronger long-term floor.

Traders should watch for a sustained break above $1.24642 to confirm bullish momentum, while a drop below could accelerate selling pressure.

EUR/USD Technical Forecast

EUR/USD is trading at $1.03895, down 0.14%, as the pair hovers near its pivot point at $1.03747. Price action remains indecisive, with buyers attempting to defend this level while sellers test the downside. Immediate resistance stands at $1.04407, with stronger resistance at $1.04934, a key zone where momentum could shift if breached.

On the downside, $1.03213 serves as immediate support, while $1.02711 marks a critical level that could accelerate losses if broken.

The 50-day EMA at $1.03740 and 200-day EMA at $1.03780 suggest the pair is consolidating, awaiting a breakout. A sustained move above $1.03747 supports a bullish bias, while a break below may trigger sharper declines.