Global financial markets have been rocked this week as the conflict between the US, Isreal, and Iran spread across the region. Markets have been highly volatile on the back of the increased geopolitical concerns; however, we are still seeing strong reactions to fundamental updates as well as the week progresses. Although largely going under the radar, US data has come in stronger than expected across the board this week and although certainly not the main driver of USD strength this week, if we see geopolitical concerns calming, then fundamentals could re-exert themselves and the dollar could gain even more ground.
We have seen stronger PMI and ADP Non-Farm data amongst other releases, however without a doubt if we so see a stronger than expected Non-Farms print then we could see the dollar take another step higher as Fed rate cut expectations recede further. The market is expecting the headline NFP number to show a 58k increase in jobs last month with the Average Hourly Earnings up 0.3% and the Unemployment Rate remaining steady at 4.3%.
The Euro has fallen over 2% this week against the dollar from high to low and looks nicely set up for a strong move if the key employment numbers come in off expectations. A stronger NFP number or decrease in the Unemployment Rate should see recent lows around 1.1530 challenged swiftly with a break there opening the path to fresh downside ranges, whereas a weaker number could see it move back towards the week’s opening levels and resistance just under 1.1800.
Resistance 2: 1.2078 – 2026 High
Resistance 1: 1.1791 – Trendline Resistance and Weekly High
Support 1: 1.1528 – Weekly Low and Trendline Support
Support 2: 1.1389 – August 2025 Triple Bottom
