These 4 views on the US Dollar: The NFP could break resistance or break the rally

The US Dollar (USD) enters the September Nonfarm Payrolls (NFP) release near the yearly highs, and the four most recent FXStreet analyses are split down the middle. Two see the US Dollar staying bid into the report, with an upside breakout on the table, while two argue the rally has already gone too far, with the market already pricing an October Federal Reserve (Fed) interest rate hike that a single jobs report is unlikely to confirm.

Frank Walbaum: "USD approaches resistance ahead of NFP"

Frank Walbaum sees the Dollar approaching a key resistance area with tomorrow's NFP as the deciding input. "The USD remains strong and is approaching a key resistance area," he wrote, adding that "the NFP report tomorrow will be the main catalyst, with the market watching closely for a surprise in either direction." His read is genuinely two-way: "A stronger-than-expected reading could push the USD significantly higher and potentially break the 101.50 resistance level," while "a weaker reading could cause the USD to lose momentum and move back below resistance, although fresh USD buyers could step in at lower levels." — Read the full report

ING Global Economics Team: "The US Dollar remains very well bid"

ING anchors the US Dollar's strength in the activity side of the US economy, backing up the Fed's hawkish stance. "The DXY dollar index is testing the highs of the year at 101.80," its analysts wrote, noting that even a softer August PCE inflation print "barely put a dent in Fed tightening expectations." Their conviction is firmer than Walbaum's: "Barring some breakthrough in US-Iran negotiations, it looks like the dollar will stay bid in October." They expect DXY "to remain bid in a 101.50-101.80 range today, but an upside breakout is a possibility should tomorrow's US data surprise on the upside." — Read the full report

Matthew Ryan: "The move has perhaps gone a little bit too far"

Matthew Ryan is the clearest contrarian of the four. He acknowledges the US Dollar has appreciated versus most currencies this week as rising yields drive investors to safe havens and the market prices in further aggressive Fed rate increases into 2027 — but he pushes back on the move itself. "We still think that the move has perhaps gone a little bit too far, and we wouldn't be at all surprised to see a mild correction in the coming days should oil prices, bond yields and risk sentiment stabilise." Ryan adds a data caveat: "the US economy is also not completely impenetrable, with both consumer confidence (81.9) and JOLTS job openings (7.079M) fell quite sharply at the latest reading." Crucially, he does not think the NFP report alone will reignite October rate-hike bets. — Read the full report

Alexander Kuptsikevich: "The Dollar has retreated from the edge"

Alexander Kuptsikevich captures the retreat already underway. "The US Dollar retreated from two-month highs amid a slump in the probability of an October Fed rate rise from 72% to 45% and a fall in oil prices," he wrote, pointing to New York Fed President John Williams signalling "no urgency to make further changes" and leaning towards a hike before year-end rather than in October. Yet he stops short of turning bearish: "the balance of power could shift back towards the hawks should strong US labour market data be released on Friday," and "the markets have not abandoned the idea of an October rate rise, which suggests the US dollar remains in a strong position." — Read the full report

The takeaway

The four analysts split evenly on the US Dollar: Walbaum and ING see a strong bid into NFP with an upside breakout at 101.80 on the table, while Ryan warns the rally has gone too far and Kuptsikevich documents a market already pulling back as October-hike odds slide from 72% to 45%. Watch Friday's NFP headline and any shift in Fed rate pricing — a strong print confirms the bulls' breakout, while a soft one vindicates the contrarians' "gone too far" call.

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)