US Dollar Price Forecast: Falls Sharply After Weak Jobs Report, GBP/USD and EUR/USD

Market Overview

During Monday’s Asian session, the US Dollar Index (DXY) hovered around 98.60, stabilizing after a sharp 1.5% decline on Friday. The drop followed a disappointing Nonfarm Payrolls (NFP) report, which showed the US added just 73,000 jobs in July, well below the expected 110,000 and the revised June figure of 147,000. The unemployment rate also ticked up to 4.2%, fueling concerns about labor market weakness.

Fed Rate Cut Bets Intensify

The soft data shifted market expectations, with traders now pricing in 63 basis points of rate cuts by year-end, up from 34 bps earlier. The first cut is expected in September, adding sustained pressure on the dollar as the policy outlook turns increasingly dovish.

Trump Fires BLS Head, Stirring Doubts

Adding to the uncertainty, Donald Trump dismissed BLS Commissioner Erika McEntarfer, accusing the agency of historic errors in job data.

The move, announced via Truth Social, has drawn criticism over the politicization of key economic institutions and raised concerns about data integrity.

Outlook: Greenback Faces Crosswinds

The dollar remains vulnerable as political disruption and economic concerns converge. Markets will watch upcoming data and Fed signals closely, while Trump’s actions inject further volatility into the policy landscape.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index (DXY) is stabilizing above key support at 98.60, following a sharp drop triggered by weaker-than-expected US job data. July’s nonfarm payrolls came in at 73,000, well below forecasts, raising market expectations for a Fed rate cut later this year.

The index is now trading just above the 100-EMA, with the 50-EMA acting as resistance near 99.16. Despite the pullback, the uptrend remains intact as long as the ascending trendline holds.

A break below 98.60 could expose further downside toward 98.14, while a recovery above 99.20 may renew bullish momentum.

GBP/USD Technical Analysis

GBP/USD remains confined within a well-defined descending channel, despite Friday’s sharp rebound. The pair briefly tested resistance near 1.3300, coinciding with the channel’s upper boundary and the 50-EMA, but failed to break higher.

This suggests the broader downtrend remains intact unless buyers push through the confluence zone. The 100-EMA above adds another layer of resistance. If bulls lose steam, GBP/USD risks sliding back toward 1.3220 and potentially 1.3140.

A breakout above 1.3300 could signal a shift in trend, but for now, the path of least resistance remains lower unless global sentiment markedly improves.

EUR/USD Technical Forecast

The EUR/USD pair remains under pressure despite Friday’s sharp rebound, as it struggles to break above a descending trendline and the 50-EMA. However, sentiment remains cautious ahead of upcoming US CPI data and renewed trade policy risks.

From a technical standpoint, bulls face a confluence of resistance around 1.1590–1.1600. A failure to clear this zone could trigger a retest of 1.1540 or lower.

For now, EUR/USD appears to be consolidating in a bearish structure, with downside risk prevailing unless the pair manages a decisive close above the trendline.