USD Index Faces Critical Test as Hawks Eye Last Opportunity

The US Dollar Index hovers near 106.50 as forex markets brace for pivotal economic releases that could determine the Federal Reserve's hawkish stance. EUR/USD remains range-bound around 1.0560, showing minimal movement amid pre-data caution. USD/JPY continues consolidating near 149.80, with traders awaiting clearer directional cues from upcoming US economic indicators. This week's US ISM Manufacturing PMI and Friday's Non-Farm Payrolls report represent potentially the final opportunity for dollar bulls to justify expectations of sustained Fed hawkishness. Technical analysis shows the Dollar Index testing crucial support at 106.30, with resistance at 107.00. A break below support could trigger broader dollar weakness, potentially pushing EUR/USD toward 1.0650 and USD/JPY below 149.00. Market positioning remains cautiously bullish on the dollar, though conviction appears to be waning ahead of key data releases.