HG MARKETS: 

The US Dollar Index (DXY) is moving sideways around 99.92 as investors remain cautious ahead of the US Nonfarm Payrolls (NFP) report for July. The NFP is particularly important because the Federal Reserve is currently maintaining a hawkish stance, with three Fed officials having supported an interest-rate hike at the latest meeting. Markets expect the US economy to have added around 85,000 jobs in July, making the actual figure highly important for the Dollar’s next move. If payroll growth comes in significantly below 85,000, it would suggest that the US labor market is losing momentum and could reduce expectations for another Fed rate hike, putting downward pressure on the Dollar. On the other hand, a stronger-than-expected employment report would indicate that the economy remains relatively resilient, potentially keeping inflation and interest-rate concerns elevated and supporting the US Dollar.

Investors are also watching developments surrounding the Iran-Oman agreement related to navigation through the Strait of Hormuz. The waterway is strategically important because around one-fifth of global energy supplies pass through it, meaning any disruption can quickly affect oil prices, inflation expectations and financial-market sentiment. If the agreement provides greater stability and ensures smoother navigation through the Strait, geopolitical risk could decline and some safe-haven demand for the US Dollar could fade. At the same time, lower geopolitical tensions could reduce pressure on energy prices, potentially easing inflation concerns and influencing expectations for Federal Reserve policy. However, if negotiations fail or tensions increase again, the resulting uncertainty could encourage investors to seek safety in the US Dollar. Therefore, both the US jobs report and developments around Hormuz could create significant volatility in the DXY.

From a technical perspective, the Dollar Index continues to show a bearish near-term structure despite holding close to the psychologically important 100.00 level. The index is trading below its 20-day EMA at 100.46, indicating that the short-term trend remains under pressure, while the RSI at 39.62 is below the neutral 50 level and confirms that selling momentum is still stronger than buying momentum. The first major support is located around 99.49–99.48, where the lower boundary of the descending channel and previous lows come together; a decisive break below this zone could open the way toward 99.00. On the upside, 100.04 is the first resistance, followed by the stronger 100.46 EMA level. A sustained daily close above 100.46 would improve the technical outlook and could signal a recovery toward higher levels, whereas continued rejection below this resistance would keep the bearish bias intact. Therefore, the NFP result is likely to be the key catalyst that determines whether DXY breaks below support or starts a recovery above resistance.