US Dollar Forecast: DXY Slips as Traders Eye Support at 99.10 as Core PCE and Jobs Data Loom

Dollar Tests Key Support: Will 99.10 Hold?

The U.S. Dollar Index (DXY) is slipping on Monday as traders assess whether the minor pivot at 99.10 will act as a new support level. The market’s near-term direction hinges on this point, with a sustained move above potentially driving an intraday rally towards 100.276. A breakthrough there could open the path to a test of the short-term pivot at 101.302. However, a failure to hold 99.10 risks a sharper decline toward the three-year low of 97.921.

At 14:02 GMT, the U.S. Dollar Index is trading 99.439, down 0.148 or -0.15%.

Is U.S. Trade Uncertainty Keeping Dollar Buyers on Edge?

The dollar’s weakness comes as traders await fresh signals on U.S. trade policy. Tensions between Washington and Beijing remain unresolved, despite recent softening in tone from both sides.

While President Trump has suggested progress in trade talks, Chinese officials have denied ongoing negotiations. Treasury Secretary Scott Bessent’s remarks on Sunday also lacked confirmation of active discussions, reinforcing market uncertainty. The dollar has lost over 4% against both the euro and yen through April, on course for its largest monthly decline in more than two years.

Will Friday’s Jobs Report Trigger a Fed Rethink?

Focus is now turning to Friday’s U.S. employment report, a critical indicator of whether trade-related volatility has impacted real-world economic activity. Expectations suggest continued job growth, albeit at a slower pace.

Federal Reserve officials, including Chair Jerome Powell, have indicated openness to rate cuts if risks to economic growth materialize. However, analysts at Saxo Bank emphasize that the Fed will need clear evidence from hard data—particularly on jobs and consumption—before considering policy changes, suggesting that markets may be pricing in cuts too aggressively.

How Are Global Events Weighing on Dollar Sentiment?

Several other major economic releases this week could further influence dollar positioning. First-quarter U.S. GDP figures and the Fed’s preferred inflation gauge, core PCE, are scheduled, alongside European GDP and inflation readings.

Meanwhile, outside of the U.S., traders are monitoring Australian inflation data and Canadian elections, although these events are expected to have a limited direct impact on DXY.

In Japan, the Bank of Japan meets Thursday, where no policy changes are anticipated, but market attention will center on currency-related comments, especially following reports—later denied—that the U.S. favors a weaker dollar.

Market Forecast: Dollar Vulnerable to Deeper Pullback If Support Breaks

The immediate technical focus remains squarely on 99.10. Holding above this level could stabilize the dollar and spark a rebound towards 100.276 and beyond. However, ongoing trade uncertainties, cautious Fed positioning, and critical upcoming data leave the dollar exposed.

A decisive break below 99.10 would likely accelerate selling pressure, increasing the probability of a test of 97.921. Traders should brace for heightened volatility around economic releases and Fed commentary this week.

More Information in our Economic Calendar.