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Major Currencies Extend Gains as US Dollar Weakens Ahead of Key US Data | 5th August, 2026

Dollar Under Pressure Global currency markets remained tilted in favor of major currencies as the US Dollar continued to weaken ahead of key US labor market data, including the ADP Employment report. Easing risk aversion and shifting expectations around central bank policy encouraged investors to trim Dollar positions, while renewed optimism surrounding the European Central Bank and resilient sentiment toward commodity-linked currencies supported gains across the foreign exchange market. Traders now await fresh US economic data for further direction on the Dollar’s next move. US Dollar Index (DXY) Forecast Current Price and Context The US Dollar Index remained under pressure as sellers targeted the 99.40 level, marking its weakest level in nearly two months. Investors continued reducing Dollar exposure ahead of the ADP Employment report and other key US labor market data that could influence the Federal Reserve’s policy outlook. Key Drivers • Geopolitical Risks: Reduced demand for safe-haven assets weighed on the US Dollar. • US Economic Data: Markets focused on the upcoming ADP Employment report and broader labor market indicators. • FOMC Outcome: Expectations that the Federal Reserve may become less aggressive continued limiting Dollar demand. • Trade Policy: Stable global trade conditions allowed macroeconomic data to remain the primary focus. • Monetary Policy: Shifting expectations for future Fed policy continued driving Dollar weakness. Technical Outlook • Trend: Bearish • Resistance: 100.00 • Support: 99.40 • Forecast: The Dollar Index could remain under pressure if US employment data reinforces expectations of a less restrictive Federal Reserve. Sentiment and Catalysts • Market Sentiment: Bearish as traders continue rotating away from the US Dollar. • Catalysts: ADP Employment report, upcoming US labor market data, Treasury yields, and Federal Reserve communications. AUD/USD Forecast Current Price and Context AUD/USD held firm around the 0.7050 level as the broader bearish tone in the US Dollar continued supporting the Australian Dollar. Despite limited domestic catalysts, favorable market sentiment allowed the pair to maintain its bullish bias. Key Drivers • Geopolitical Risks: Easing global tensions supported demand for risk-sensitive currencies. • US Economic Data: Dollar weakness remained the primary catalyst. • FOMC Outcome: Expectations of a less aggressive Federal Reserve continued supporting AUD/USD. • Trade Policy: Stable regional trade conditions remained supportive. • Monetary Policy: Investors balanced Reserve Bank of Australia expectations against the Federal Reserve’s outlook. Technical Outlook • Trend: Bullish • Resistance: 0.7100 • Support: 0.7010 • Forecast: AUD/USD could continue advancing if the US Dollar remains under pressure following upcoming US economic data. Sentiment and Catalysts • Market Sentiment: Moderately bullish. • Catalysts: US employment data, Chinese economic releases, and Reserve Bank of Australia commentary. EUR/USD Forecast Current Price and Context The Euro extended its advance as expectations of a relatively hawkish European Central Bank continued attracting buyers. At the same time, broad-based US Dollar weakness provided additional support for the common currency. Key Drivers • Geopolitical Risks: Stable geopolitical conditions shifted attention toward monetary policy. • US Economic Data: Softer Dollar sentiment strengthened EUR/USD. • FOMC Outcome: Expectations for a more balanced Federal Reserve outlook supported Euro gains. • Trade Policy: Trade developments had limited market influence. • Monetary Policy: Hawkish ECB expectations remained the primary driver for the Euro. Technical Outlook • Trend: Bullish • Resistance: 1.1650 • Support: 1.1560 • Forecast: EUR/USD may continue its upward momentum if the ECB maintains a hawkish stance and US data disappoints. Sentiment and Catalysts • Market Sentiment: Bullish as investors continue favoring the Euro. • Catalysts: ECB commentary, US employment data, Eurozone inflation, and Federal Reserve expectations. GBP/USD Forecast Current Price and Context The British Pound continued grinding higher above 1.3450 as traders positioned ahead of the US ADP Employment report. Broad Dollar weakness remained supportive of Sterling despite relatively quiet domestic economic conditions. Key Drivers • Geopolitical Risks: Reduced safe-haven demand weakened the US Dollar. • US Economic Data: Investors awaited fresh employment figures from the United States. • FOMC Outcome: Expectations of a softer Fed outlook supported GBP/USD. • Trade Policy: Stable market conditions limited external pressures. • Monetary Policy: Diverging expectations between the Bank of England and Federal Reserve continued shaping the pair. Technical Outlook • Trend: Bullish • Resistance: 1.3500 • Support: 1.3400 • Forecast: GBP/USD could extend gains if upcoming US labor data weakens expectations for further Fed tightening. Sentiment and Catalysts • Market Sentiment: Moderately bullish. • Catalysts: ADP Employment report, Nonfarm Payrolls, Bank of England commentary, and US Dollar performance. USD/CHF Forecast Current Price and Context The Swiss Franc strengthened as easing risk aversion reduced demand for the US Dollar. Improved market sentiment and broad Dollar weakness allowed the Franc to appreciate despite a relatively quiet Swiss economic calendar. Key Drivers • Geopolitical Risks: Reduced market uncertainty lowered demand for the Greenback. • US Economic Data: Investors awaited key US labor market releases. • FOMC Outcome: Expectations of a less aggressive Federal Reserve weakened the Dollar. • Trade Policy: Stable trade conditions remained supportive of overall market confidence. • Monetary Policy: Diverging policy expectations continued influencing USD/CHF. Technical Outlook • Trend: Bearish USD/CHF • Resistance: 0.8060 • Support: 0.7980 • Forecast: USD/CHF may continue trending lower if US labor market data fails to revive Dollar demand. Sentiment and Catalysts • Market Sentiment: Bearish for USD/CHF. • Catalysts: ADP Employment report, US Treasury yields, Federal Reserve guidance, and broader market risk sentiment. Wrap-Up The US Dollar remained on the defensive as investors positioned ahead of key US labor market data and reassessed expectations for future Federal Reserve policy. The softer Greenback supported broad gains across major currencies, with the Euro benefiting from hawkish ECB expectations, the Australian Dollar maintaining its bullish bias, and both the British Pound and Swiss Franc extending their advances. Attention now turns to the ADP Employment report and upcoming US labor data, which could determine whether the Dollar’s recent weakness continues or begins to stabilize in the sessions ahead. Ready to trade global markets with confidence? Join Moneta Markets today and unlock 1000+ instruments, ultra-fast execution, ECN spreads from 0.0 pips, and more! Start now with Moneta Markets!

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Publication date:

2026-08-05 11:10:40 (GMT)

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