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Published: 2 June 2026,07:18
Daily Market Analysis New
*The DXY climbed to around 99.18 as renewed Middle East tensions and stalled U.S.-Iran negotiations boosted demand for the greenback amid heightened geopolitical uncertainty.
*Better-than-expected ISM Manufacturing PMI reinforced confidence in the U.S. economy, while rising oil prices fueled inflation concerns.
*Markets are watching the May ADP payrolls release closely. A stronger-than-expected reading could strengthen the USD further by reducing rate-cut expectations.
The U.S. Dollar Index (DXY) rose approximately 0.25-0.28% on June 1, 2026, closing around 99.18. This marked a modest extension of gains from May and reflected renewed safe-haven demand amid geopolitical tensions.
Primary drivers included setbacks in the U.S.-Iran ceasefire negotiations. Reports of suspended communications, potential closure of the Strait of Hormuz, and ongoing military frictions pushed oil prices higher, reigniting inflation concerns. This supported expectations for the Federal Reserve to maintain elevated rates longer. Additionally, stronger-than-expected ISM Manufacturing PMI data (rising to 54, signaling robust factory expansion) reinforced U.S. economic resilience relative to peers.
The USD is likely to remain supported in the coming days to weeks, trading in a 98.5-100 range. Geopolitical risks and sticky inflation favor higher-for-longer U.S. rates, providing yield support. However, broader 2026 trends point to potential moderation if global growth stabilizes and Fed easing resumes later. Upside risks include stronger U.S. data; downside could emerge from de-escalation in the Middle East or softer domestic figures.
The ADP report for May is forecast around 110-116K, following April’s 109K print. This private payroll indicator often previews Friday’s official Nonfarm Payrolls. A stronger-than-expected reading (e.g., above 120K) would bolster USD strength by signaling labor market stability, reducing rate-cut odds amid existing inflation pressures. A miss could temper gains, fueling expectations for Fed cuts at the mid-June FOMC meeting under new Chair Kevin Warsh. Markets will scrutinize this alongside ISM Services data for Fed policy clues.
Technical Analysis
U.S. Dollar Index staged a notable rebound from its weekly low near the 98.75 level, advancing more than 0.6% in the latest session. The recovery reflects a temporary resurgence in buying interest after a period of sustained weakness and suggests that the index has found short-term support at lower levels.
Despite the rebound, the broader technical outlook remains cautious. The DXY has yet to surpass its previous swing high and continues to trade within a lower-high price structure, indicating that the prevailing downtrend remains intact. Until the index is able to break above key resistance levels and invalidate this bearish pattern, the recovery is likely to be viewed as a corrective rebound rather than the start of a sustained trend reversal.
Momentum indicators continue to reinforce the bearish bias. The Relative Strength Index (RSI) is forming lower highs, reflecting weakening underlying momentum and a lack of sustained buying pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) remains below the zero line, indicating that bearish momentum continues to dominate despite the recent recovery.
Resistance Levels:100.30, 101.75
Support Levels: 97.80, 96.60
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