US Dollar Forecast: Non-Farm Payrolls Test Market Sentiment – GBP/USD and EUR/USD Outlook

US Dollar Awaits Key Data: Jobs Report, Inflation Sentiment in Focus

The US Dollar (USD) is set for a pivotal session on Friday, with critical economic data shaping its trajectory. At 2:30 PM, the Non-Farm Employment Change is expected to show 164K new jobs, down from the previous 227K, while the Unemployment Rate is anticipated to hold steady at 4.2%. Average Hourly Earnings, a key inflation indicator, is forecast to grow 0.3%, slightly slower than the prior 0.4%.

Later, at 4:00 PM, the University of Michigan’s Consumer Sentiment Index will provide insights into public confidence, alongside Inflation Expectations, forecasted at 2.8%. These metrics will offer clues about consumer spending and the Federal Reserve’s next moves.

While the dollar currently holds firm, weaker-than-expected data could pressure its bullish momentum, particularly if labor market resilience falters. Conversely, stronger results may fuel further gains, reinforcing the dollar’s appeal in the face of global uncertainties.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $109.353, up 0.17%, showing strength as it consolidates above the pivot point at $108.965. Immediate resistance is noted at $109.530, with the next targets at $110.017. On the downside, support levels are situated at $108.552 and $107.851, marking key areas for potential pullbacks.

The 50 EMA at $108.682 supports the bullish outlook, while the 200 EMA at $107.481 reinforces a long-term uptrend. A sustained break above $109.530 could pave the way for further gains, targeting $110.017. However, a drop below $108.965 would weaken sentiment, signaling a possible bearish reversal.

GBP/USD Technical Analysis

The GBP/USD is trading at $1.22774, down 0.21%, reflecting bearish sentiment as the pair remains below the pivot point at $1.23302. Immediate support lies at $1.22533, with further downside targets at $1.21985. On the upside, resistance is observed at $1.24077, with a stronger hurdle at $1.24694.

The 50 EMA at $1.24322 highlights a cap on short-term recovery, while the 200 EMA at $1.25911 reinforces broader bearish momentum. A decisive break above $1.23302 could shift sentiment toward bullish recovery, targeting resistance levels.

EUR/USD Technical Forecast

The EUR/USD is trading near $1.0300, reflecting a cautious tone in the market. The pair hovers below the pivot point at $1.03231, indicating a bearish bias unless the price decisively breaks above this level. Immediate resistance is seen at $1.03716, with further barriers at $1.04590.

On the downside, support levels are marked at $1.02219 and $1.01682, signaling potential targets for bearish continuation.

The 50 EMA at $1.03442 acts as a dynamic resistance, reinforcing the downward momentum, while the 200 EMA at $1.04592 reflects a broader bearish structure. Traders should watch for a break above $1.03231 to signal potential recovery, while sustained trading below could drive the pair toward deeper support levels.