EUR/USD Price Holds 1.1650 as Dollar Awaits NFP and Eurozone Data Weakens

EUR/USD Price Holds 1.1650 as Traders Brace for NFP Data

The EUR/USD pair is trading near 1.1654, consolidating between short-term support at 1.1644 and resistance at 1.1682. The euro has slipped modestly after a mixed U.S. labor print showed ADP private payrolls rising only 54,000 in August, well below the 65,000 forecast and sharply down from July’s revised 106,000. Jobless claims also ticked higher to 237,000 from 229,000, while U.S. Q2 nonfarm productivity was revised up to 3.3% from 2.4% and unit labor costs eased to 1.0% from 1.6%, showing cooling wage pressure. The Dollar Index (DXY) recovered to 98.30 on this mix, helping trim EUR gains. The euro’s softness was compounded by Eurozone July retail sales falling 0.5% month-over-month against a –0.2% forecast, reversing June’s 0.6% increase. Year-on-year growth slowed to 2.2%, weaker than 2.4% expected and below June’s 3.5% pace, raising fresh concerns about consumer resilience.

Fed Policy Expectations Shape EUR/USD Trajectory

Markets are pricing a 97% to 99% probability that the Federal Reserve cuts rates by 25 basis points in September, up from 92% earlier in the week. Traders are also weighing the possibility of three total cuts before year-end if employment continues to falter. Minneapolis Fed President Neel Kashkari warned tariffs are inflating consumer prices, while Atlanta Fed’s Raphael Bostic stressed inflation remains a greater risk than labor weakness. Nevertheless, Fed independence is under scrutiny, with political pressure from Washington eroding confidence in the dollar. In contrast, ECB policymakers have signaled no urgency to ease, preferring steady rates as the eurozone weathers U.S. tariffs better than expected. Diverging stances are key to why EUR/USD remains anchored above 1.16 despite dollar resilience.

Technical Outlook: Support at 1.1600, Resistance at 1.1725

On the 4-hour chart, EUR/USD is rangebound, capped by resistance at 1.1725 and supported at 1.1600. The pair is chopping through its 30-SMA while RSI pivots around 50, showing indecision. Bulls need a clean break above 1.1682 to extend toward 1.1708 and 1.1735. Failure to hold 1.1644 risks a slide toward 1.1611 and potentially 1.1400 if selling accelerates. Trend structure remains mildly bullish after the breakout above the 50-day average earlier this week, but momentum is muted until NFP provides a catalyst. Traders should monitor $1.1611 as the trigger for downside and $1.1725 as the breakout level for bulls.

Macro Divergence Between U.S. and Eurozone Supports Euro Recovery View

BofA analysts maintain that the dollar’s current strength is fragile, underpinned more by temporary labor data than structural drivers. They forecast EUR/USD to reach 1.20 by year-end and 1.25 by the end of 2026, citing Washington’s weakening Fed independence and Germany’s fiscal expansion program. German spending is expected to accelerate eurozone growth toward convergence with the U.S., narrowing the growth gap. Analysts emphasize that dollar shorts remain far from crowded positioning, leaving space for renewed bearish momentum against the greenback once policy easing unfolds. The U.S. debt load above $37 trillion and political interventions in the Fed amplify this bearish dollar thesis.

Intraday Signals and Trading Flows

High-frequency trading desks report EUR/USD support between 1.1648–1.1669 forming a bullish price channel, with stop-loss clusters sitting below 1.1612. Long positions are favored above this zone with targets at 1.1708 and 1.1735. If the price closes below 1.1612, shorts will gain control, opening downside to 1.1580. The Bull Bear Power indicator has flipped bullish, and volume is building in favor of euro demand ahead of NFP. Volatility is expected to rise with tomorrow’s data, and traders are already pricing swings of 25–35 pips intra-day.

Near-Term Outlook Hinges on U.S. Payrolls

Consensus for Friday’s nonfarm payrolls is 75,000, with unemployment expected to tick to 4.3%. A softer print would reinforce dovish Fed bets and drive EUR/USD toward 1.1735, while a stronger surprise risks dragging the pair back under 1.16. For now, EUR/USD remains in consolidation with traders watching whether the euro can reclaim momentum into the 1.17 zone or whether the dollar regains footing on firmer jobs data.

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