US Nonfarm Payrolls Data to Set Federal Reserve Interest Rate Expectations

Investors are closely watching the US Nonfarm Payrolls (NFP) data release for July, which is expected to significantly influence Federal Reserve interest rate expectations. Strategists at DBS highlight that analysts anticipate a read of 80k in the NFP figures, and with the FOMC leaning hawkish, the labor market has become a critical factor for the Fed's next policy move.

DBS cautions that a sub-80k NFP could weigh on the US Dollar (USD), as it may douse expectations for another Fed rate hike this year. The Dollar Index Spot currently trades near flat at around 99.92, maintaining a bearish near-term bias below the 20-day exponential moving average (EMA) at 100.46.

Immediate structural support is located near the lower band of the descending channel at 99.49-99.48, where prior lows and the channel floor converge to form a key demand zone. A break below this zone would expose the asset to 99.00. On the topside, initial resistance is seen at the channel top around 100.04, followed by stronger overhead supply at the 20-day EMA at 100.46.