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29.06.202611:55 Forex Analysis & Reviews: The Dollar Weakens Ahead of US Employment Data (NZD/USD May Rise, While #NDX Faces Downside Risk)

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The U.S. dollar continues to edge lower following the short-lived rally triggered by the Federal Reserve's latest policy meeting. Market participants are now focused on the upcoming June employment reports from ADP and the U.S. Department of Labor.

As anticipated, the U.S. dollar is likely to continue its gradual decline toward the end of June as markets await fresh U.S. labor market data, which could determine the direction of both the dollar and broader financial markets ahead of the release of consumer inflation figures.

Why Is the Dollar Declining?

In my view, the primary reason is the recent decline in crude oil prices, which is likely to have a moderating effect on inflation both globally and in the United States. If that proves to be the case, the hawkish message delivered by members of the Federal Open Market Committee (FOMC), who indicated after this month's meeting that interest rates could be raised once or twice before the end of the year, may gradually lose its influence.

These expectations could weaken significantly if the June Consumer Price Index (CPI) report shows even a modest slowdown in inflation.

Should this scenario materialize, the US Dollar Index could initially decline toward the 100 level. If additional June inflation indicators, such as the Personal Consumption Expenditures (PCE) Price Index, confirm softer price pressures, the index could extend its decline toward 98.

Another important factor is that the recent escalation of tensions between the United States and Iran, although it temporarily pushed crude oil prices higher, failed to provide meaningful support for the U.S. dollar in the Forex market. There are two key reasons for this. First, oil prices remain close to their levels seen at the end of February. Second, expectations of easing inflation in the United States continue to weigh on Treasury yields, including both the benchmark 10-year Treasury note and the 2-year Treasury note, which traditionally respond quickly to changes in expectations for Federal Reserve monetary policy.

What Can Be Expected Today?

I believe the U.S. dollar is likely to remain under pressure through Wednesday, when ADP releases its report on private-sector employment.

Daily Forecast

Exchange Rates 29.06.2026 analysis

Exchange Rates 29.06.2026 analysis

NZD/USD

The pair is trading within a narrow range between 0.5625 and 0.5655 as investors await fresh U.S. economic data. If the upcoming figures weigh on the U.S. dollar, NZD/USD could break above this range and advance toward 0.5700. A break above 0.5658 may serve as a potential buying signal.

#NDX

The NASDAQ 100 futures CFD is currently trading above 28,910.00. Growing signs that the artificial intelligence-driven rally is losing momentum could push the contract below this level, opening the way for a decline toward 28,209.50. A break below 28,811.90 may serve as a potential selling signal.

Pati Gani
analytik InstaForexu
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