US Dollar Forecast: EUR/USD

EUR/USD bounces back ahead of the June low (1.1347) to halt the recent series of lower highs and lows, but the exchange rate may no longer track the positive slope in the 50-Day SMA (1.1574) after closing below the moving average for the first time since February.

US Dollar Forecast: EUR/USD Bounces Back Ahead of June Low

Keep in mind, EUR/USD slipped to a fresh monthly low (1.1401) as the Federal Reserve kept US interest rates on hold, and it seems as though the central bank is in no rush to further unwind its restrictive policy as Chairman Jerome Powell emphasizes that ‘we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.’

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In turn, waning expectations for an imminent Fed rate-cut may keep the Greenback afloat ahead of the next meeting in September, and developments coming out of the US may continue to sway EUR/USD as the Non-Farm Payrolls (NFP) report is anticipated to show a further expansion in employment.

US Economic Calendar

The US is expected to add 110K jobs in July with Average Hourly Earnings projected to increase to 3.8% from 3.7% during the same period, and evidence of a strong labor market may drag on EUR/USD as it encourages the Fed to keep US interest rates higher for longer.

However, a weaker-than-expected NFP report may produce headwinds for the US Dollar as it puts pressure on the Fed to lower interest rates, and EUR/USD may stage a larger rebound over the remainder of the week as it holds above the June low (1.1347).

With that said, EUR/USD may further retrace the decline from earlier this week as it no longer carves a bearish price series, but the rebound in the exchange rate may turn out to be temporary as it closes below the 50-Day SMA (1.1574) for the first time since February.

EUR/USD Chart – Daily

Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView  

• EUR/USD bounces back ahead of the June low (1.1347) to hold above the 1.1390 (78/6% Fibonacci extension) to 1.1440 (61.8% Fibonacci extension) region, with a move above 1.1560 (100% Fibonacci extension) bringing the 1.1690 (78.6% Fibonacci extension) to 1.1750 (78.6% Fibonacci retracement) zone on the radar.
• A breach above the monthly high (1.1830) opens up the September 2021 high (1.1909), but EUR/USD
• Lack of momentum to hold above the 1.1390 (78/6% Fibonacci extension) to 1.1440 (61.8% Fibonacci extension) region may lead to a test of the June low (1.1347), with the next area of interest coming in around 1.1260 (61.8% Fibonacci extension) to 1.1280 (61.8% Fibonacci retracement).

Additional Market Outlooks

US Non-Farm Payrolls (NFP) Report Preview (JUL 2025)

USD/CHF Trades Above 50 Day SMA for First Time Since February

USD/JPY Fails to Test July High Ahead of Fed Rate Decision

British Pound Forecast: GBP/USD Falls to Fresh Monthly Low

— Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong