US Dollar Retreats as June Non-Farm Payrolls Miss Expectations

The US dollar declined broadly on Thursday following the release of disappointing labor market data. June’s Non-Farm Payrolls (NFP) came in at 57K, significantly missing the forecasted 114K, while May’s figures were revised downward from 172K to 129K, highlighting a sharper-than-expected slowdown in job growth.

The US Dollar Index, which measures the greenback against a basket of six major currencies, dropped 0.6% immediately following the report, sliding to its lowest level in two weeks.

The weaker employment data provides the Federal Reserve with temporary breathing room, cooling expectations for a rate hike in July despite the central bank’s recent hawkish stance. However, market participants continue to place high bets on a potential rate increase in September.

From a technical perspective, the recent decline was triggered by the completion of a bearish failure swing pattern on the daily chart. The index violated the initial Fibonacci support at 100.58 (the 23.6% retracement of the 97.44/101.55 rally), though a daily close below this level is required to confirm the bearish signal.

Despite this, the overarching daily trend remains bullish. While momentum indicators are turning southward, they remain firmly in positive territory, suggesting the current move is a correction rather than a full reversal.

Support is expected to hold around the 100 zone—a key psychological level that aligns with the 38.2% Fibonacci retracement and the bullish channel support line. Stability at this level would maintain the long-term bullish outlook and set the stage for a subsequent extension of the upward trend.

Resistance: 100.96; 101.55; 102.00; 102.40
Support: 100.29; 100.00; 99.50; 99.24

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