- The EUR/USD weekly forecast suggests continued dollar weakness.
- The nonfarm payrolls figure came in significantly below estimates.
- Traders worried about a looming election that could throw France into political chaos.
The EUR/USD weekly forecast suggests continued dollar weakness as employment data puts pressure on the Fed to cut rates.
Ups and downs of EUR/USD
The EUR/USD pair had a bullish week as the dollar collapsed amid downbeat US employment figures. However, the euro also came under pressure due to political uncertainty in France.
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Data throughout the week on US job vacancies, private employment, and unemployment claims revealed unexpected softness in the labor market. Additionally, the nonfarm payrolls figure came in significantly below estimates, leading to a surge in expectations for a Fed rate cut and a decline in the dollar.
Meanwhile, the euro was fragile as traders worried about a looming election that could throw France into political chaos.
Next week’s key events for EUR/USD
Next week, traders will focus on inflation data from the US. The CPI and PPI reports will show the state of consumer and producer prices. In the previous month, the CPI report revealed soft figures that boosted bets for Fed rate cuts. Market participants were more convinced that Trump’s tariffs had little impact on price pressure.
Another downbeat report will support the current trend of poor employment figures, boosting rate cut expectations. On the other hand, if inflation is hot, rate cut bets will ease, and the dollar will recover.
EUR/USD weekly technical forecast: Bulls approach the 1.1800 resistance
On the technical side, the EUR/USD price trades above the 22-SMA, with the RSI above 50, suggesting a bullish bias. However, the price action also shows that bulls are struggling to detach from the 22-SMA. Moreover, they are facing solid resistance at the 1.1800 key level.
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Initially, the price pierced the SMA, showing bears had gained momentum. However, the price failed to break below the 1.1400 support level. Here, EUR/USD made a morning star pattern, showing bulls would take back control. Soon after, the price broke above the 22-SMA.
However, bulls must now break past the 1.1800 resistance level to continue the previous bullish trend. Such a move would solidify the bullish bias. On the other hand, if the resistance holds firm again, bears might return to challenge the prevailing trend. A break below the 1.1400 would confirm a reversal to the downside.
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