EUR/USD Forex Signal: Extremely Bullish as ADP Data Points to Fed Cut

Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1750.
• Add a stop-loss at 1.1550.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1550,
• Add a stop-loss at 1.1750.

The EUR/USD pair rebounded to its highest point since October 20 after ADP published a weak jobs report, raising odds that the Federal Reserve will cut interest rates in the coming meeting. It rose to 1.1665, up by 1.37% from its lowest point last week.

Odds of a More Dovish Fed Rise

The EUR/USD pair rose as the probability that the Federal Reserve will cut interest rates next week rose. Polymarket and Kalshi odds jumped to over 90% after ADP released its weekly jobs report.

This report showed that the private sector shed 32,000 jobs last week after adding 47k jobs in the previous week. Economists were expecting the number to come in at 10,000.

This figure means that the labor market is struggling as companies absorb Donald Trump’s tariff costs. For example, American Eagle, a clothing retailer, estimated that tariffs would cost it $70 million this year.

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Economists and traders now estimate that the bank will cut rates by 0.25% next week and then accelerate the process in the next meetings.

On the other hand, the European Central Bank (ECB) is likely done with interest rate cuts. Recent macro data showed that inflation remains close to the target rate of 2.0%.

Also, data by S&P Global released this week showed that the manufacturing and services sectors are doing well. As a result, officials have hinted that interest rates were in a good place.

EUR/USD Technical Analysis

The daily chart shows that the EUR/USD pair has rebounded in the past few days. It rose from a low of 1.1500 last week to the current 1.1665.

The pair has moved above the upper side of the symmetrical triangle pattern. It has also moved above the 50-day moving average, while the Relative Strength Index (RSI) has moved above the neutral point at 50 and is pointing upwards.

Therefore, the pair will likely continue rising as bulls target the next key resistance level at 1.1750. More gains may see it retest the year-to-date high of 1.1900. On the other hand, a move below the support at 1.1550 will invalidate the bearish outlook.

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