Strong NFP Supports USD Outlook, but Market Reaction Remains Mixed

The March NFP report came in stronger than expected, with 178K jobs added compared to the 65K forecast, and the unemployment rate improved to 4.3%. However, wage growth slowed to 0.2%, which slightly reduces inflation pressure.

Overall, the strong jobs data support the view that the Federal Reserve is unlikely to cut interest rates soon, especially with inflation still above target. However, market reaction has been limited despite the positive NFP report, showing there is still uncertainty and conflicting sentiment among traders.

Technically, the US Dollar Index is trading at around 99.90 with recent resistance around 99.50 (NFP release candle). A daily close above this level would strengthen the bullish bias. Beyond that, the 100.00 to 100.44 is a key resistance zone. However, Iran tensions and the Strait of Hormuz situation remain the main drivers, and any progress toward peace could still pull the dollar back toward the 99.00 to 98.60 area.

DXY 4 Hour Chart

Bottom line:

The jobs report supports the US dollar and a higher-for-longer rate outlook, but Middle East developments remain the key factor for markets right now. This scenario can work unless any comments from Iran, Trump or Israel mess with it.