The US Dollar Index (DXY) experienced a slight recovery on Thursday, approaching the 104.00 level, despite concerns about the labor market. This uptick occurred as sellers paused, but the overall outlook for the dollar remains bearish. Market expectations of a September rate cut by the Federal Reserve and weakness in the US labor market continue to weigh on the currency.

Key Market Developments:

• US Department of Labor data revealed a larger-than-expected increase in jobless claims, raising concerns about the health of the labor market.
• The Philadelphia Fed Manufacturing Survey for July showed a significant improvement, exceeding expectations.
• Despite the data, dovish bets on the Fed remain steady, with a September rate cut largely priced in.
• Weaker data could prompt markets to consider a rate cut in the upcoming July meeting.

Technical Analysis:

The DXY rebounded near 104.00, but the bearish outlook persists as the index remains below key moving averages. Technical indicators like the RSI and MACD remain below 50, indicating continued bearish momentum. However, a minor upward correction may occur in the near future. Strong support levels are found at 103.50 and 103.00.