20-day EMA reclaimed: US Dollar Index price forecast as safe-haven demand supports recovery ahead of US NFP

101.95 is within reach as the US Dollar Index surges. The AI sell-off is lifting demand for safe-haven assets.
At 13:30 GMT, October’s US NFP figures will be released, with investors watching closely.
Expectations for Fed monetary policy are unlikely to shift significantly on the US NFP release.

Safe-haven demand is driving the US Dollar (USD) sharply higher against its major peers. An accelerating sell-off in Artificial Intelligence (AI) infrastructure stocks has prompted global sector rotation, increasing demand for defensive assets.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

101.95 is the approximate level of the US Dollar Index (DXY) at the time of writing, up 0.35%. The index measures the Greenback against six major currencies.

US Dollar: Today’s Currency Performance

Against the major currencies listed below, the US Dollar (USD) recorded its largest gain versus the Australian Dollar today. The table presents the percentage changes for each currency pairing.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.29%	0.34%	0.05%	0.38%	0.81%	0.75%	0.04%
EUR	-0.29%		0.04%	-0.26%	0.09%	0.52%	0.45%	-0.25%
GBP	-0.34%	-0.04%		-0.30%	0.05%	0.48%	0.40%	-0.30%
JPY	-0.05%	0.26%	0.30%		0.35%	0.78%	0.70%	0.00%
CAD	-0.38%	-0.09%	-0.05%	-0.35%		0.42%	0.35%	-0.35%
AUD	-0.81%	-0.52%	-0.48%	-0.78%	-0.42%		-0.08%	-0.77%
NZD	-0.75%	-0.45%	-0.40%	-0.70%	-0.35%	0.08%		-0.69%
CHF	-0.04%	0.25%	0.30%	-0.01%	0.35%	0.77%	0.69%

Percentage movements between the major currencies appear in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Selecting the US Dollar on the left and following that row across to the Japanese Yen, for instance, gives the percentage change for USD (base)/JPY (quote).

AI sell-off spreads across US equities; defensives fare better

Selling has spread far beyond technology stocks, according to strategists at Danske Bank, who say the recent “AI unwind escalated into an outright rout yesterday and took the whole US market with it,”. Their assessment notes that “the S&P 500 fell 4.4%, with every sector lower and IT leading the declines, while the Nasdaq Composite lost 5.5% and the Nasdaq 100 6.4%, its worst session since March 2020.” Danske also stresses that “defensives held up far better, so this was rotation within equities as much as money leaving them,” highlighting a marked change in sector positioning rather than an across-the-board withdrawal from risk assets.

Attention on the economic calendar centres on October’s United States (US) Nonfarm Payrolls (NFP) report, due at 13:30 GMT and keenly awaited by investors.

Estimates put new hiring by US employers at 65K, up from September’s 29K. The Unemployment Rate is expected to remain at 4.2%.

Annual growth in Average Hourly Earnings, a key wage indicator, is forecast to moderate to 2.9% Year-on-year (YoY), compared with 3% in September. Monthly growth is projected at 0.3%, following the previous reading of 0.1%.

US Dollar’s payroll response grows less predictable

A clear directional response to labour data is no longer evident in the US currency, Commerzbank says. The bank notes that recent payroll reports have prompted more subdued and uneven foreign exchange moves. In its words, “the US dollar does not seem entirely sure how to react to the labour market figures,” leading it to suggest that, “barring any major surprises, we might be in for a fairly relaxed end to the week.”

US Dollar Index: Technical Outlook

101.86 is the trading level for Dollar Index Spot on the daily chart. Holding above the 20-day exponential moving average (EMA) at 101.79 gives the near-term outlook a modest bullish tilt and points to underlying demand following the recent consolidation. At 53.26, the Relative Strength Index (RSI) remains neutral, indicating positive momentum without an overstretched advance.

The 20-day EMA around 101.79 provides initial downside support. Nearby, the session’s opening level near 101.86 serves as a pivot that needs to hold to maintain the positive tone. A sustained move below this support zone would indicate weakening bullish pressure and leave scope for a deeper correction towards recent lows near 101.00. To revisit the yearly high near 103.00, the index needs to remain above the 20-day EMA.

(The technical analysis of this story was written with the help of an AI tool. Know more.)