USD Fundamental Analysis: December 1-5, 2025
The Key Point
The dollar faces a series of employment and inflation releases this week that will define whether the Fed continues cutting rates. With speculators heavily short in the COT, any upside surprise could trigger a bullish correction.
Critical Data by Day
Monday 1 – Manufacturing
ISM Manufacturing PMI | Forecast: 49.0
Powell speaks → High expected impact
If lower: USD under pressure | If higher: bullish support
Tuesday 2 – Weak Employment
JOLTS Job Openings | Previous: 7.227M
Bowman (FOMC) speaks
Expectation: Further decline in openings would confirm cooling labor market
Wednesday 3 – Critical Session
ADP Private Employment | Forecast: 19K (very low)
ISM Non-Manufacturing | Forecast: 52.0
Crude Inventories
Key point: If ADP drops to 19K, it confirms labor slowdown → rate cuts → USD weakens
Thursday 4 – Labor Trend
Initial Jobless Claims | Forecast: 220K
If higher: negative for USD
Friday 5 – Inflation & Consumption
Core PCE (MoM/YoY) | Forecast: 0.2% / 2.9%
Personal Spending | Forecast: 0.3%
Michigan Consumer Sentiment
Decisive: PCE below forecast = more cuts = USD falls | PCE higher = USD rises
Scenarios
Bearish Scenario (65% probability)
ADP weak < 50K
PCE below forecasts
Jobless claims rising
Implication: DXY targets 99.15 → 98.94 (key support)
Bullish Scenario (35% probability)
ISM PMI > 50 (surprise)
ADP > 50K
PCE in line or above
Implication: Break above 99.38 → 99.56-99.78
Conclusion
Central expectation: Bearish pressure on USD if ADP and employment are weak.
Key driver: Wednesday’s ADP (19K forecast). If weak, accelerates the rate cut narrative and pressures the dollar toward 99.15-98.94.
If ADP surprises higher with strong PCE on Friday, bullish correction could push DXY to 99.56+.
Key monitoring: ADP (Wed) → Jobless Claims (Thu) → PCE & Spending (Fri)
Technical bias: DXY < 99.38 = bearish | Break > 99.38 = scenario change
Technical Analysis
DXY (Dollar Index)
The dollar index has been in a correction within a daily uptrend, with the last key support at 98.94. Currently, the price trades below two supply zones: the early session POC at 99.38 and Friday’s POC.
Consider new USD selling versus counterparts while DXY remains below the POC 99.39, with potential extension to 99.15 and possible breach of the lower channel limit, targeting daily support at 98.94. A confirmed break (two consecutive lower lows) would signal a daily bearish reversal.
However, if the price breaks above 99.39, the next target is 99.56. A sustained recovery above POC 99.38 would aim to break intraday resistance at 99.78, 99.90, and potentially surpass 100.00 during the week.
