U.S. Dollar Index in limbo of renewed selling if JOLTS and factory data disappoint
U.S. Dollar Index U.S. Dollar Index
The U.S. Dollar Index began June on a weak footing, extending the broader downtrend that has persisted since mid-May. Monday’s session recorded a sharp decline of over 0.8%, taking the cumulative loss since mid-May to approximately 3.3%. The index dropped below last week's low of 98.24 to register a fresh six-week low at 98.16. This decline was largely fuelled by disappointing U.S. manufacturing data for May, which came in worse than expected, highlighting the economic pressure from trade uncertainty during the Trump administration.
• The Dollar Index slides to a six-week low at 98.16 before pausing in consolidation
• Short-term EMA resistance clusters threaten bullish recovery from 98.16
• Focus shifts to upcoming U.S. job and factory data for next directional cue
Despite these bearish macro signals, the dollar managed to strengthen during the Asian session on Tuesday, June 3rd, particularly against major counterparts such as the Yen, Euro, and the Australian dollar. The index rebounded off the 98.16 low and recovered nearly half of Monday’s losses. However, this upward move was unable to break past the former support turned resistance level at 98.48, where price stalled and has since entered a consolidation phase just above 98.16.
The U.S. Dollar Index price dynamics (April - May 2025). Source: TradingView
This zone between 98.16 and 98.48 is currently acting as a decision area for traders. A sustained break above 98.48 would be necessary to indicate a potential reversal or broader recovery in the dollar. However, technical charts suggest a challenging path for the bulls. The one-hour chart shows a cluster of exponential moving average resistance levels stacked above 98.48. This EMA alignment typically reflects short-term market pressure that could suppress attempts to drive prices higher.
The U.S. Dollar Index technicals flag further downside without strong macro catalysts
Adding to this bearish sentiment, both the daily and four-hour Relative Strength Index indicators continue to tilt into negative territory. These technical readings suggest weakening momentum for the dollar and support the view that further downside may be on the cards unless stronger bullish catalysts emerge.
Attention now turns to the upcoming batch of U.S. economic data scheduled for release at 14:00 GMT. Key reports on job openings (JOLTS), durable goods orders, and factory orders will likely set the tone for the next move. Another round of disappointing numbers, especially from the labor market, could reinforce concerns about economic fragility and place renewed downward pressure on the dollar. If these figures miss expectations, the U.S. Dollar Index could retest or even fall below the newly set six-week low at 98.16.
Tariff escalation worsened sentiment and triggered a sharp drop in the U.S. Dollar Index. Price broke below 98.24 support and headed towards the 97.50 monthly low.
