EUR/USD price prediction: Growth during Asian session indicates potential breakout
The pair trading near 1.0831
EUR/USD price extended its March gains on Friday, recovering from Thursday’s pullback that resulted from a test of the 1.0855 resistance level. The pair climbed during the Asian and European sessions, now trading near 1.0831 as it approaches the key resistance zone that capped gains in the previous session.
The recent price movement is closely tied to the weakening U.S. dollar, pressured by declining Treasury yields. Market expectations for multiple Fed rate cuts in 2025 have driven USD lower, with traders anticipating more aggressive easing amid signs of slowing U.S. economic growth. Adding to the bearish sentiment on the dollar, U.S. Initial Jobless Claims dropped to 221K, below the expected 235K, indicating a resilient labor market that complicates the Fed's decision-making on rate cuts.
EUR/USD price outlook: NFP data expectations overshadows EUR/USD overbought reading
EUR/USD price dynamics (Oct 2024 - March 2025). Source: TradingView.
Technically, EUR/USD’s ascent has pushed the daily and 4-hour RSI into overbought territory, suggesting limited upside potential in the short term. If momentum stalls near 1.0855 again, consolidation may take hold, particularly as traders await the release of February’s Nonfarm Payrolls (NFP) report. The NFP market projections point to a modest rebound in job growth, with net job additions expected to rise to 160K from January’s 143K. A stronger-than-expected NFP print could temporarily support the dollar and reverse EUR/USD rally.
However, sentiment remains tilted toward further EUR/USD gains as the European Central Bank (ECB) trimmed rates by 25bps on Thursday, a move that was largely priced in. Meanwhile, falling US yields reinforce expectations that the Fed will move more aggressively than the ECB on rate cuts later in the year, keeping downward pressure on the dollar.
If EUR/USD fails to clear 1.0855, a pullback toward 1.0800 is possible. However, a breakout would strengthen bullish momentum, potentially pushing the pair toward 1.0950 in the near term. The NFP report will be the key driver of the next major move.
Eurozone retail sales rose 1.5% YOY in January, missing forecasts and signaling weaker consumer demand. As a result, EUR/USD surged 4% but entered overbought territory.
