EUR/USD Forecast: Dollar Holds as 42K Jobs Data Sparks Market Caution
The U.S. dollar held firm on Thursday following a volatile midweek session as traders weighed mixed economic data and awaited fresh...
Quick overview
- The U.S. dollar remained stable as traders assessed mixed economic data and awaited insights from Federal Reserve officials.
- The ADP Non-Farm Employment Report showed private employers added 42,000 jobs in October, exceeding expectations.
- The ISM Services PMI indicated modest expansion at 52.4, contributing to market uncertainty regarding the economy's strength.
- The EUR/USD pair is at a technical crossroads, with potential for a bullish reversal if it breaks above key resistance levels.
The U.S. dollar held firm on Thursday following a volatile midweek session as traders weighed mixed economic data and awaited fresh signals from Federal Reserve policymakers.
According to the latest ADP Non-Farm Employment Report, private employers added 42,000 jobs in October, topping the 32,000 forecast and rebounding from a 29,000 drop in September.
While the upbeat jobs figure suggests resilience, the ISM Services PMI reading of 52.4, only slightly above September’s 50.0, hinted that the economy’s largest sector is expanding modestly. This mix of data has left the market uncertain, with the dollar consolidating gains amid muted conviction.
Markets Eye Fed and UoM Data
Traders are now focused on remarks from FOMC member Christopher Waller, expected later Thursday, for insights into the Fed’s stance on future rate moves. Recent moderation in inflation and softer employment trends have fueled speculation that policymakers may keep rates steady for longer.
Friday’s University of Michigan Consumer Sentiment Index, forecast at 53.0 versus 53.6 prior, will be another key gauge of household optimism and inflation expectations heading into the final quarter of 2025.
Key Highlights:
- ADP jobs: +42K (forecast +32K)
- ISM Services PMI: 52.4, modest expansion
- Consumer Sentiment (forecast): 53.0
- Fed outlook: leaning cautious on rate hikes
EUR/USD Near Inflection Zone
The EUR/USD pair trades around $1.1529, stabilizing after a steep three-week decline. A bounce from $1.1468 support suggests early accumulation, forming a bullish engulfing pattern on the 4-hour chart, often a precursor to short-term reversals.
Technically, the pair faces resistance near $1.1543, aligned with the 20-EMA. A breakout above this level could lift prices toward $1.1597, where the descending trendline and 50-EMA converge.
Momentum is improving, with the RSI climbing from 36 to 53, confirming reduced selling pressure. However, traders await a decisive close above $1.1550 to validate a bullish shift. Failure to do so may invite another pullback toward $1.1460 or $1.1420.
In essence, the euro-dollar pair is hovering at a technical crossroads, where macro uncertainty meets early signs of recovery. A clear breakout could set the tone for a broader trend reversal into mid-November.
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