Hot NFP, Stronger Dollar—But the Bear Trend Isn’t Over Yet!

The latest US Non-Farm Payrolls (NFP) report comes in hotter than expected. We see 206,000 jobs added in June, with a notable upward revision to May's figures. The unemployment rate drops to 4.1%, finally breaking the months-long stickiness around 4.2%. The only soft point is average hourly earnings, which come in at 0.2%—a slight miss but still supportive.

This surprise upside in the labor market triggers a swift USD rally. DXY surges over 0.5% in under 15 minutes. EUR/USD drops 70 pips, USD/JPY jumps nearly 1%, and risk currencies like AUD and NZD tumble before rebounding.

Markets quickly reprice July expectations—now 95% odds of no rate cut. But September, October, and December are still pricing in a combined 75 basis points in cuts. So the medium-term macro view stays the same: the Fed remains on a cutting path.

In that context, I’m looking at the recent USD bounce as a short-term move—more of a reaction than a reversal. I continue to monitor potential long opportunities on EUR/USD, GBP/USD, and AUD/USD, as well as a short on USD/JPY. These are *not confirmed entries*—just high-probability setups I’m watching closely.

I expect more USD softness over Q3, with DXY possibly heading toward 94–95. The bigger picture still favours a risk-on environment and a weaker dollar.

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