USD forecast: Dollar on Edge – Shutdown freezes the market [Video]

Shutdown reality: Data blackout deepens

The United States remains in a full-scale government shutdown, and the longer it lasts, the darker the data void becomes.

Several major agencies, including the Bureau of Labor Statistics (BLS) and Census Bureau, are affected - meaning crucial reports such as CPI, PPI, Retail Sales, Durable Goods, and GDP revisions may not be released on schedule if the shutdown continues through the week.

This lack of visibility is forcing traders and institutions alike to operate without confirmation data, leading to cautious positioning and range-bound trading across the board. The Fed, too, faces a challenge: without real-time inflation data, its forward guidance risks becoming disconnected from reality.

The White House website itself now reflects the shutdown’s duration - a symbolic clock counting the days Washington remains frozen while the economy waits.

Technical outlook (4H – DXY at 98.8 level)

The Dollar Index remains confined in its 98.30–99.30 equilibrium range, forming a tight compression structure. Recent rebounds off 97.30 show defensive strength, but upside progress has stalled.

Price is balancing on low volatility and unconfirmed fundamentals - a textbook setup for an eventual expansion once clarity returns.

• Support Zone: 98.00–98.5.
• Resistance Zone: 99.5–100.0.
• Directional Bias: Neutral with breakout potential building.

Bullish scenario: Panic bid on prolonged shutdown

If the political impasse worsens, expect safe-haven inflows back into USD.

• Trigger: 4H close above 99.00.
• Retest Zone: 98.70–99.00 (FVG base).
• Targets: 99.80 → 100.20.
• Invalidation: Drop under 98.00.

Bearish scenario: Relief bid on shutdown resolution

Should a funding deal be reached, risk assets rally, and dollar weakens.

• Trigger: 4H close below 98.50.
• Retest Zone: 98.40–98.50.
• Targets: 97.80 → 97.20.
• Invalidation: Move back above 98.70.

Incoming data outlook: Further delays likely

The next U.S. data cycle (CPI, PPI, Retail Sales, and Jobless Claims) may not arrive on their scheduled dates if the shutdown persists beyond this week.

This delay means:

• Algorithmic models dependent on inflation or employment data will remain inactive or misaligned.
• Volatility compression will continue across USD pairs.
• Once data finally returns, the backlog effect will cause extreme reactions, as markets digest multiple reports at once.

In essence - the longer the delay, the stronger the breakout when information finally flows again.

Final thoughts: How traders should approach majors

Until the government reopens, the market is running on narrative, not numbers. That calls for a strategic shift in trader behavior:

1. Reduce exposure & stay tactical

Avoid heavy directional bias - range plays, short-term scalps, and mean reversion setups are safer while data remains dark.

2. Focus on technical liquidity levels

With fundamentals paused, liquidity zones and session highs/lows become your map. Use smart money setups like liquidity sweeps and FVG retests to anchor trades.

3. Monitor political headlines

Shutdown negotiations can move markets faster than any economic release right now. Use alerts for any White House or Congressional updates.

4. Prepare for the data surge

Once data resumes, expect a two-day window of high volatility - CPI, NFP, and retail data may release in clusters. Pre-position or stand aside until the dust clears.

Summary

The Dollar’s current strength is deceptive - built not on conviction, but on absence of data. The longer Washington stays silent, the sharper the eventual correction.

Traders should respect the range, stay nimble, and treat every move as information gathering, not confirmation. The real storm begins the moment the first report goes live.