USD/JPY daily candlestick chart. Source: TradingView.

This Week’s Main Event: NFP and CPI
Non-Farm Payrolls (NFP) (Wednesday, February 11th)

Expected: +70,000 jobs (after a weak December print)

Unemployment: Expected to hold at 4.4%

What to watch: If jobs come in above 150K, that’s dollar bullish. Below 50K? Expect the dollar to tank as rate cut bets accelerate.

Consumer Price Index (CPI) (Friday, February 13th)

Expected: 2.9% year-over-year

What to watch: Above 3.0% is dollar bullish—it means the Fed has to stay tight. Below 2.5% is dollar bearish—rate cuts are coming faster.

Where’s the Dollar Headed?

The DXY (U.S. Dollar Index) is currently sitting around 97.00 after falling nearly 10% in 2025. It recently tested lows not seen since early 2022 at 95.51. The big question: is this the bottom, or is there more downside?

Base case (most likely)

The dollar stays weak but doesn’t collapse. Look for DXY to trade between 95.551 and 99.482 over the next few weeks. The Fed is still expected to cut rates at least twice this year, which keeps a lid on dollar strength. The mid-point of this range at 97.522 is particularly interesting and could act as a pivot while traders try to figure out the timing of the Fed’s next move.

Bullish scenario

NFP crushes expectations (>150K) and CPI comes in hot (>3.1%). Markets reprice Fed cuts from June to September or later. DXY could rally back to 98.50-100.

Bearish scenario

Jobs disappoint (<50K) and CPI drops below 2.5%. Markets start pricing a March Fed cut. DXY could fall to 95.551 to 94.629.

The Bottom Line for Traders

GBP/USD: Bearish. The BoE is dovish and likely cutting soon. Watch for moves toward 1.35.

EUR/USD: Neutral. The ECB isn’t hawkish, but the euro has momentum. Range-bound around 1.18-1.20.

AUD/USD: Bullish. The RBA is hiking while everyone else is cutting or pausing. Look for 0.66-0.67.

USD/JPY: Bullish. The BoJ remains dovish despite political stability. 157-160 range likely.

DXY: Short-term direction depends entirely on this week’s data. Strong NFP and CPI could spark a relief rally to 99.492 to 100.395. Weak data accelerates the move to 95.551 to 94.629.

Final Thoughts

We’re at a critical juncture for the dollar. The RBA just threw a curveball by hiking, the BoE and ECB are stuck in dovish territory, and Japan’s election changed the political landscape but not monetary policy.

The real action happens this week. Wednesday’s NFP and Friday’s CPI will determine whether the dollar finds a floor around 96.762 to 96.476 or breaks down toward 95.137 to 94.629.