EUR/USD forecast: Forex Friday September 5, 2025

Shortly, the US jobs report will be released, and this could have a major say in the EUR/USD forecast if we see a number that far exceeds or misses expectations. As we found out last month, don’t forget to keep an eye on revisions. Once the jobs data is out of the way, investor attention will shift to key macroeconomic data scheduled for next week, including the ECB’s rate decision and US inflation data – the last important releases before the eagerly awaited FOMC meeting in the following week.

 

How will the dollar react to the NFP report?

 

Expectations are downbeat at 75K, meaning the scope for disappointment is lower. You can read our full nonfarm payrolls preview here. But we had plenty of soft employment indicators from the ADP, JOLTS and Challenger this week, which does point to a weak jobs figure today. That said, the ISM PMI and its employment component both came in stronger than expected, leaving the dollar in a holding pattern ahead of today’s crucial jobs report.

 

For what it is worth, I think any small upside surprises should have a short-lived positive impact on the dollar, given the growing probability of three rate cuts from the Fed this year. A weaker net reading of the headline plus revisions should keep the pressure on the dollar and support the EUR/USD forecast. However, if the data smashes expectations you’d think the BLS’s credibility might be questioned under the new leadership. But this should, in any case, prompt hawkish repricing of Fed rate cuts with around 60 bps of cuts by year end is now priced in.

 

Week ahead: Key macro highlights that could impact the EUR/USD forecast

 

Once the jobs report is out of the way, investors will start looking ahead to next week when we will have plenty of data that could impact the financial markets. As far as the EUR/USD forecast is concerned, the following are the most important macro highlights to watch:

 

• ECB rate decision - Thursday, September 11:

 

The bar for another rate cut by the ECB is set high. The eurozone’s trade agreement with the US could have been far worse. What’s more, we have seen a bit of improvement in forward-looking sentiment indicators from Germany, while Eurozone inflation has been somewhat hotter than expected. To be clear, no rate cut is expected at this meeting and only around 8-10 basis points of cuts is still priced in for the rest of the year. Any hints of a split ECB therefore should hut the euro, at least temporarily. Otherwise, if Christine Lagarde sounds more neutral to hawkish then this should keep our bullish EUR/USD forecast firmly intact.

 

• US CPI - Thursday, September 11

 

During the Jackson Hole symposium, Powell all but admitted that labour market risks are now more pressing than inflation and that policy adjustment is likely. Nevertheless, this CPI report will be the last major data release ahead of the FOMC’s September 17 meeting. It will take a massive beat in CPI and probably PPI (which will be released a day before), to rise any serious question marks over the upcoming rate decision.

 

• UoM Consumer Sentiment and Inflation Expectations - Friday, September 12

 

The health of the US consumer will be put to the test by these closely-followed surveys, which are based on about 420 consumers asking respondents to rate the relative level of current and future economic conditions, and where they expect prices to be 12 months in the future. Recent survey results have pointed to stagnation, and if that trend continues, this could be negative for risk assets.

 

Technical EUR/USD forecast: Key levels to watch

 

The EUR/USD chart looks like it is gearing up for a bullish breakout – data permitting. It has been consolidating inside a triangle pattern for several days now, still holding its overall bullish structure. This consolidation therefore looks like it is a continuation pattern. It is potentially gearing up for a bullish breakout and if we see a negative dollar reaction to the NFP data today this could be the fundamental trigger.

 

 

In terms of levels to watch on the EUR/USD chart, short-term support comes in around the 1.1560-1.1620 area. Below that rage, 1.1500 is the next key support that will need to hold to keep the bulls happy and still interested. On the upside, resistance comes in around 1.1700, which was being tested at the time of writing.  This is also where the resistance trend of the triangle comes into play. If we break above here today, then the next logical target is the July high of 1.1830.

 

Eventually, the focus will then turn to the next psychologically important 1.20 handle should the macro backdrop continues to favour a bullish EUR/USD forecast. Only a strong NFP report today, and a hot set of inflation data next week could change that. I don’t think the ECB will be dovish enough to send the euro tumbling.

 

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R