USD Faces Pressure as Markets Price 55bps Fed Cuts Before NFP

USD index remains under pressure as markets price in 55 basis points of Federal Reserve rate cuts by year-end, ahead of crucial US labor market data this week. The dollar has weakened 0.2% against major peers, with traders positioning for Wednesday's ADP employment report and Friday's Non-Farm Payrolls as key risk events. Current market pricing shows the Fed leading major central banks in expected easing, contrasting sharply with minimal cuts priced for the ECB (7bps) and BoE (8bps). The Bank of Japan stands alone with 15bps of rate hikes expected. Technical analysis shows the DXY testing support at 101.50, with resistance at 102.20. A disappointing jobs report could accelerate dollar weakness, potentially pushing EUR/USD above 1.1000 and USD/JPY below 145.00. Conversely, strong employment data might trigger a hawkish repricing and dollar recovery.