The EUR/USD pair is trading at 1.1739, staying above 1.1700 as the US Dollar weakens ahead of the Nonfarm Payrolls report. The US Dollar Index (DXY) has dropped by 0.10%, indicating less strength against six major currencies. If the job market declines, the index may fall to 98.00. Federal Reserve officials have expressed mixed views. Boston Fed President Susan Collins has provided neutral comments, while New York Fed President John Williams has suggested a shift toward a more neutral policy. The market is awaiting November’s Nonfarm Payrolls and Retail Sales data on Tuesday, which could impact trading.

European Central Bank Interest Rates Outlook

Economists believe the European Central Bank (ECB) will keep interest rates unchanged until 2026, with low inflation forecasts. The ECB is expected to maintain current rates at its next meeting on December 18. This month, the Euro has performed well against major currencies, particularly the US Dollar, gaining 1.32%. For the US November Nonfarm Payrolls, analysts expect a modest job increase of 40,000, with the unemployment rate steady at 4.4%. Technical analysis indicates a neutral-to-bullish trend for EUR/USD. The pair could rise above 1.1700, potentially breaking December 11’s high of 1.1762 and aiming for 1.1800. If it falls below 1.1700, support may come in around 1.1645, with additional support at 1.1600.

Immediate Focus on November Nonfarm Payrolls Report

On December 16, 2025, the market is focusing on today’s November Nonfarm Payrolls report. The US Dollar has weakened as the Federal Reserve cut interest rates three times this year, pushing the EUR/USD above 1.1700. This could lead to significant market movements based on the jobs data released today. The expectation of only 40,000 new jobs is low, signaling a slowdown since early 2024, when monthly job gains were consistently over 150,000. A number this weak would confirm the cooling US economy, likely pushing the dollar lower and moving EUR/USD toward its next resistance level at 1.1762. However, if the unemployment rate remains at 4.4%, any positive surprise in job creation might lead to a sharp market shift. The policies of the central banks differ significantly right now, which supports the euro. While the Fed is cutting rates to boost a slowing economy, the ECB is likely to keep its rates steady through 2026, as indicated by recent polls. This difference has been a major factor, especially since Eurozone inflation dropped faster than in the US during 2024. Given the uncertainty surrounding today’s NFP release, traders might consider using options to manage expected volatility. A short-dated straddle or strangle on EUR/USD could be beneficial, allowing profits from a major price move in either direction, depending on the jobs report outcome. For those taking a directional stance using futures or other instruments, technical levels are clear. If the weak jobs trend continues, traders may want to go long, aiming above the recent high of 1.1762 with a further target of 1.1800. This aligns with the Euro’s strong performance against the dollar this month. On the other hand, the biggest risk is a stronger-than-expected jobs report, which could undermine the idea of a declining US economy. In that case, the US Dollar would likely see a sharp rebound. Traders should monitor the 1.1700 level closely; if it breaks below, a quick decline to the 100-day average near 1.1645 could follow. Create your live VT Markets account and start trading now.

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