NFP data is the crucial todayUS Dollar IndexCAPITALCOM:DXYWiseLeoTradingThe US Dollar Index remains sensitive to the US labour-market outlook ahead of today’s August nonfarm-payrolls report. Market consensus expects payrolls to rebound modestly by around 55k following July’s 23k contraction, while the unemployment rate is forecast to hold at 4.1%. Average hourly earnings are expected to rise 0.3% month-on-month and around 3.0% YoY. A weaker-than-expected payrolls outcome, an increase in unemployment, softer wage growth, or negative revisions to prior data would reinforce concerns that US labour-market momentum is slowing. That outcome could increase expectations for a more accommodative Fed policy path, push Treasury yields lower, and place renewed pressure on the dollar. Conversely, a stronger employment report, particularly one combining higher job creation with firm wage growth, could support US yields and prompt a short-term DXY rebound. However, the dollar’s recovery may be limited if markets continue to focus on slowing hiring conditions and the prospect of reduced Fed policy restraint. Therefore, the NFP report, unemployment rate, wage data, and revisions will be crucial for determining whether DXY extends its decline or stabilises after the recent selloff. Technical analysis The DXY remains bearish after failing to sustain its recovery above the 99.25 resistance level. The index reversed sharply lower from the 99.40-99.50 area, broke below 99.25, and extended losses toward the 98.55 support zone before staging only a limited rebound. Price is trading below both the 21-period EMA near 99.35 and the 78-period EMA near 99.64. The shorter EMA remains below the longer EMA, and both moving averages are turning lower, confirming negative momentum and keeping the broader technical bias tilted to the downside. The recent rejection from the 99.40–99.50 area also preserves the sequence of lower highs, while the break below 99.25 signals that sellers have regained control. By Van Ha Trinh - Financial Market Strategist at Exness