US Dollar Forecast: Greenback Awaits September NFP Data, GBP/USD and EUR/USD

Market Overview

The US Dollar Index (DXY) eased slightly but held near 99.50 in early European trade on Tuesday. Market activity remained muted as traders waited for Thursday’s September Nonfarm Payrolls (NFP) report, a key indicator that will guide the Federal Reserve’s next policy decisions.

Fed Officials Highlight Labor Market Risks

Recent comments from Federal Reserve officials pointed to growing concern over hiring trends. Fed Governor Christopher Waller noted that slower job growth could weigh on broader economic activity and suggested that a rate cut in December may be necessary if labor conditions continue to cool.

Traders are also watching scheduled remarks from Vice Chair Michael Barr and Richmond Fed President Thomas Barkin. Any firm stance on policy could influence short-term dollar moves.

Focus Turns to NFP After Shutdown-Related Delays

Economists expect US employment to rise by roughly 50,000 jobs in September, following the 22,000 increase in August. The unemployment rate is projected to remain near 4.3%.

A stronger NFP reading could lift the dollar as investors reassess the labor market’s resilience. A softer outcome may pressure the DXY and revive expectations of earlier policy easing.

Safe-Haven Demand Keeps DXY Supported

Despite uncertainty, demand for the US dollar remains steady as investors favor defensive positioning ahead of new economic data and further guidance from the Federal Reserve.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is trading around 99.46, holding within a descending channel that has guided price action since early November. The index is facing resistance near the 50-period EMA at 99.70, while support rests around 99.00 and 98.65. The RSI hovers near 50, signaling neutral momentum after a brief rebound from oversold territory.

A breakout above 99.70 could pave the way toward 100.02 and 100.30, confirming a short-term trend reversal. However, failure to sustain above 99.30 would leave DXY vulnerable to a retest of 98.99 and 98.65.

GBP/USD Technical Analysis

The GBP/USD pair trades around $1.3160, consolidating within an ascending channel as buyers defend support at $1.3135. A rebound from this zone could extend gains toward $1.3210 and $1.3247, with further upside potential toward $1.3290 if momentum strengthens.

The 20-EMA is holding as dynamic support, while the RSI sits near 50, suggesting balanced sentiment before a potential breakout. However, a close below $1.3130 may trigger a pullback toward $1.3080 or even $1.3045.

EUR/USD Technical Forecast

The EUR/USD pair is trading near $1.1598, holding above its ascending trendline support around $1.1585. A rebound from this level could confirm renewed bullish momentum toward $1.1670 and $1.1710. The 20-EMA is flattening, suggesting early consolidation before the next move, while the 200-EMA near $1.1650 serves as an intermediate resistance.

The RSI has recovered from oversold territory and is trending higher, signaling potential strength. If buyers sustain the pair above $1.1580, an upward trajectory toward $1.1750 remains likely. Conversely, a break below $1.1560 could expose support levels at $1.1540 and $1.1500.

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