EUR/USD Forecast: Dollar Extends Losses After Dismal NFP

• The EUR/USD forecast indicates continued weakness in the dollar after poor US jobs data.
• Market focus is now shifting to the US CPI report that will continue shaping the outlook for rate cuts.
• The European Central Bank will meet on Thursday.

The EUR/USD forecast indicates continued weakness in the dollar after a downbeat monthly employment report on Friday. Meanwhile, market participants are slowly shifting their focus to the ECB policy meeting, where policymakers could keep interest rates unchanged.

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Data on Friday revealed that the US economy added a dismal 22,000 jobs in August. Meanwhile, economists had expected an additional 75,000 jobs. At the same time, the unemployment rate increased from 4.2% to 4.3% as expected. The poor figures solidified bets for a September rate cut and increased the likelihood of a more dovish Fed in the future.

Market focus is now shifting to the US CPI report that will continue shaping the outlook for rate cuts. Soft figures will support the current outlook. On the other hand, hot figures could renew worries about the impact of tariffs on price pressures.

Meanwhile, the European Central Bank will meet on Thursday. Traders expect policymakers to keep rates unchanged. This will contrast sharply with the Fed, which will likely be more dovish this month. The divergence in policy and economic outlooks between the US and the Eurozone could send the euro higher in the coming months.

EUR/USD key events today

Market participants do not expect any key economic releases today. Therefore, the pair might extend the previous session’s move.

EUR/USD technical forecast: Bulls puncture the range resistance

On the technical side, the EUR/USD price is attempting to break out of its long-term range. Bulls are challenging the range resistance at the 1.1720 level. At the same time, the price trades above the 30-SMA, with the RSI near the overbought region, suggesting bulls are in the lead.

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EUR/USD has remained in consolidation for a long time, with the price moving sideways and chopping through the 30-SMA. However, before, the range, bulls were in the lead. Therefore, there is a high chance they will break out of this range to continue rallying.

A break above the range resistance would allow the price to retest the 1.1801 resistance level. On the other hand, if bulls fail to break above this level, the price will likely remain in consolidation.

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