Markets Stunned by NFP Missed; Rotation Intensifies

Ultima Markets Daily Market Insights – 3 July 2026

NFP Disappoints as Labor Market Cools

The US labor market hit a significant speed bump in June. The Non-Farm Payroll (NFP) report released yesterday revealed a meager 57,000 job gain, vastly missing the 113,000 consensus forecast.

Adding to the concern, the unemployment rate ticked down to 4.2%—not due to robust hiring, but driven by a sharp contraction of 720,000 in the labor force, pushing the participation rate to a historic low of 61.5% (excluding the pandemic).

In response, futures markets have aggressively scaled back rate-hike expectations. According to the CME FedWatch tool, the probability of a September rate hike has receded to approximately 51%, down from 66% prior to the report.

Fed Rate Probabilities | Source: CME FedWatch

This marks a dramatic reversal of the “hawkish” sentiment that had fueled the US Dollar’s recent rally.

US Dollar Analysis: Potential Short-term Reversal

The Dollar Index (DXY) broke below the 101.00 handle post-NFP; technically, the trend has shifted to a short-term bearish reversal.

DXY, H4 Chart | Ultima Markets MT5

The 100.80–101.00 zone, which previously acted as support, has now flipped into a resistance area. The index is currently eyeing 100.00 as the next major support level.

We can expect the dollar to have a further pullback toward the 100.00 level if we continue to see downside pressure below the 100.80 area.

EUR/USD: Bullish Reversal Confirmed

As previously analyzed, the weakening dollar has paved the way for a bullish reversal in EUR/USD. The successful breakout above the 1.1400–1.1430 resistance zone confirms this near-term bullish shift, and we expect further upside momentum as the dollar remains under pressure.

EURUSD, H2 Chart | Ultima Market MT5

For the near-term, watch for the recent breakout of the 1.14300 – 1.13800 range bound (along with the 1.1400 round number support).

If we see the breakout validated by the retest of 1.14300 support, expect a potential bullish reversal in the pair for the near-term.

Gold: Bottom Found at 4,000

With the breach of the $4,100 resistance, gold’s “defense campaign” on the $4,000 mark can be claimed successfully, leading gold to now test the $4,200 zone. This can be viewed as a bullish reversal.

XAUUSD, H2 Chart | Ultima Markets MT5

While the near-term outlook is increasingly bullish, intraday traders should be alert for profit-taking pullbacks at the $4,200 resistance level. The $4,100 level now serves as primary support in the event of a correction.

Strategy: Look for short-term pullback opportunities at the $4,200 resistance, or position for long entries if the price stabilizes near the $4,100 support.

Nasdaq 100: Tech Under Pressure

Over the US Equities market, The NFP report triggered a sharp sector rotation. While the Dow Jones hit a record high, the tech-heavy Nasdaq 100 buckled, sliding 1.79% due to profit-taking in AI and semiconductor stocks.

Investors are clearly rotating out of high-growth tech into defensive blue-chip assets. Near-term, the Nasdaq 100 is expected to face continued pressure as long as it remains below the 30,000 level.

NAS100, H4 Chart | Ultima Markets MT5

The near-term Nasdaq shows a converging triangle formed, suggesting investors are in an indecisive stage. While pressure is expected below 30,000, the recent converging triangle also suggests that investors are not actually bearish on the tech sector yet.

The outlook remains cautiously bullish for the tech index, and traders should watch for short-term price action within the range.

Market Summary

Yesterday’s “cold” jobs data effectively reset market expectations, cooling fears of an imminent Fed rate hike and sparking a classic sector rotation. While the broader economy shows signs of labor market fatigue, the flight to safety and blue-chip equities has pushed the Dow to historic highs, even as the Nasdaq suffers from an AI-driven profit-taking wave.

Investors are now positioned in a “cautious” mode regarding the Fed’s next move, with gold and major currencies benefiting from the cooling dollar.

For today, we expect the market to track on the aftermath of the NFP, while the price action likely to follow the technical.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.