Market narrative
The U.S. Dollar faces renewed uncertainty as the November Non-Farm Payrolls (NFP) report has been cancelled once again, extending the government’s data blackout caused by the ongoing shutdown. This marks the second consecutive month without an official labor report – a critical input for the Federal Reserve’s policy outlook.
In our previous coverage of the NFP postponement, we highlighted that missing employment data would distort rate expectations and weaken the dollar’s macro foundation. That warning has materialized: the shutdown continues to paralyze data flow, eroding both investor confidence and the Fed’s ability to assess economic conditions.
Markets are now running on substitute data such as private-sector payrolls and sentiment surveys, which lack the weight of official labor releases. This has created a fog of uncertainty across forex markets, leaving traders reluctant to take large USD directional bets.
Why the government shutdown still persists
Key reasons behind the ongoing shutdown:
- Legislative deadlock: The Senate and House remain divided on multiple spending bills. Republicans push for spending cuts and foreign aid reductions, while Democrats demand the preservation of healthcare and social funding.
- Ideological entrenchment: Both parties are using the standoff to secure political leverage ahead of the 2026 midterm cycle. Each vote failure further erodes trust, prolonging the impasse.
- Economic feedback loop: As more agencies shut down, government services freeze and data collection halts. The longer the shutdown continues, the more politically costly it becomes to reopen.
The result: Washington’s paralysis is bleeding into the economy, weakening consumer sentiment and shaking confidence in U.S. governance – all of which weigh heavily on the U.S. Dollar’s stability.
Fundamental fallout: NFP cancelled again
The cancellation of the NFP report – traditionally the single most influential U.S. data release – means the Federal Reserve will head into its next meeting partially blind. Without fresh employment data, assessing inflationary pressure, wage growth, and policy timing becomes guesswork.
This uncertainty has left traders in a holding pattern:
- Policy blind spots: The Fed must rely on outdated or incomplete indicators.
- Market hesitation: FX markets are range-bound as liquidity thins.
- Confidence shock: Institutional investors are rotating to safer or clearer markets (like EUR and JPY), avoiding heavy USD exposure.
The narrative now revolves around information risk rather than rate speculation – a clear shift from monetary focus to political dysfunction.
Technical outlook: DXY loses bullish structure
This structural reversal echoes the broader fundamental tone: bulls are exhausted, and the dollar’s momentum has turned fragile.
Bullish scenario – Rebound toward 100.00 before resolution
A short-term rebound remains possible if DXY can hold above 99.40 and reclaim the 99.80-99.90 zone, which now serves as the bearish order block.
Conditions for upside recovery:
- Washington signals progress on a temporary funding deal.
- USD sentiment stabilizes as risk-off demand re-emerges.
- Price closes back above the bearish OB to confirm reaccumulation.
Targets:
- 100.00 – 100.20 – 100.30 (previous high & mid-FVG)
Invalidation:
Failure to reclaim 99.80 or a 4H close below 99.40 confirms the bearish continuation bias.
Bearish scenario – downtrend continuation toward 98.80
If the bearish order block holds and the dollar remains below 99.80, sellers are likely to extend control.
Conditions for downside continuation:
- Shutdown persists with no funding progress.
- Risk-on sentiment strengthens globally (stocks recover, commodities rally).
- DXY fails to reclaim lost structure.
Targets:
- 99.30 – 99.10 – 98.80 (October structural lows & liquidity zones)
Invalidation:
Reclaiming 100.00 and closing above 100.20 would neutralize the bearish bias.
Final thoughts
The dollar’s weakness now mirrors America’s political dysfunction. With data pipelines frozen and policy visibility lost, DXY is trading blindfolded – reacting more to Washington headlines than to economic signals.
The breakdown of the bullish order block and the emergence of a bearish structure confirm what markets are already pricing in: fading confidence and increasing vulnerability. Unless the government resolves the shutdown soon, traders should expect a continuation of range-bound or bearish bias into mid-November.
Until clarity returns, the path of least resistance for the dollar remains down.
