US Dollar Price Forecast: Weak Jobs Data Weighs on Greenback – GBP/USD and EUR/USD

Market Overview

The US Dollar Index (DXY) hovered in a tight range near 97.70–97.75 during Asian trading, showing little momentum after its modest overnight rebound. Market sentiment remains cautious as expectations of a dovish Federal Reserve cap further gains.

Traders are closely watching upcoming FOMC remarks in the North American session for directional cues.

Weak Jobs Data Reinforces Rate Cut Outlook

The latest ADP employment report underscored weakness in the labor market, with private employers cutting 32,000 jobs in September, the steepest drop since March 2023.

August figures were also revised down to a loss of 3,000 jobs from a previously reported gain. This reinforces market expectations of two Fed rate cuts before year-end, pressuring the dollar as investors anticipate a more accommodative stance.

The ISM manufacturing PMI improved slightly to 49.1 in September but remained in contraction for a seventh month, offering limited support to the Greenback.

Government Shutdown Adds to Dollar Headwinds

The partial US government shutdown adds uncertainty, raising the risk of delays to critical data releases, including Friday’s Nonfarm Payrolls report. With economic signals already soft, the absence of timely data could amplify volatility in the USD.

Outlook

In the near term, the DXY is likely to remain range-bound, with any rebound facing resistance amid weak labor data, dovish Fed expectations, and political uncertainty.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is trading near 97.63, struggling to hold above the 50-EMA at 97.79 and the 200-EMA at 97.73. Price action has weakened after breaking down from a rising channel, signaling fading bullish momentum.

The RSI at 44 remains below neutral, suggesting sellers are slowly regaining control. If DXY fails to reclaim the 97.89 resistance, a move lower toward 97.20 appears likely, with deeper support at 96.83 and 96.23.

For traders, the setup favors short positions on failed retests of 97.80–97.90, targeting 97.20–96.80. A decisive break above 97.90, however, would challenge the bearish outlook and could reopen upside toward 98.56.

GBP/USD Technical Analysis

The GBP/USD pair is trading near $1.3494, holding above the support zone at $1.3467, which has acted as a key pivot area. The 50-EMA at $1.3456 and the 200-EMA at $1.3482 are converging, suggesting potential for a momentum shift if bulls maintain control.

The RSI at 60 signals mild bullish momentum, though not yet overbought, giving room for further gains. If buyers push beyond resistance at $1.3537, the next upside targets could be $1.3591 and $1.3670.

On the downside, a drop back below $1.3467 risks exposing deeper support at $1.3386. Traders should watch for candlestick confirmation near these zones to gauge direction.

EUR/USD Technical Forecast

The EUR/USD pair is consolidating around $1.1746, trading just above the 50-EMA ($1.1735) and 200-EMA ($1.1737), signaling short-term balance. Price remains trapped in the $1.1720–$1.1780 range, where repeated rejections show indecision.

The RSI at 54 sits near neutral, reflecting muted momentum, but the recent break from a descending channel hints at a possible bullish shift. A decisive close above $1.1780 could open the path to $1.1820 and $1.1870.

On the downside, failure to defend $1.1720 exposes weakness toward $1.1660 and $1.1615. Traders may look for confirmation candles—engulfing or hammer patterns—for cleaner entries, aligning with whichever breakout direction prevails.