The euro and the pound continue to trade higher against the US dollar in the wake of last week's Federal Reserve meeting. As widely anticipated, the Fed kept interest rates unchanged and reaffirmed that future monetary policy decisions will hinge on incoming economic data. Because maximum employment is one half of the Fed's dual mandate alongside price stability, each labour market print carries outsized weight in shaping market expectations for the timing and pace of potential rate adjustments. This measured posture offered no new support for the dollar, while softer US labour market figures released yesterday compounded the downward pressure.

According to the latest ADP report, the US private sector added only 44,000 jobs, falling well short of forecasts for 68,000 and a sharp decline from the prior month's 95,000. The ADP release is closely watched as a private-sector precursor to the government's official payrolls data later in the week, making any miss or beat a key input for FX positioning. Although the S&P Global Services PMI surpassed expectations, the ISM report delivered a more mixed picture: the headline services index slipped to 54.1, and its employment component dropped to 47.4, indicating further cooling in the labour market. Against this backdrop, investors have heightened expectations of a broader US economic slowdown, enabling both the euro and the pound to sustain their upward momentum.

EUR/USD

EUR/USD posted strong gains last week, breaking decisively above the key resistance level at 1.1500. Since the start of this week, the pair has consolidated in a range between 1.1500 and 1.1560 as markets await fresh macroeconomic data. Technical analysis indicates the bullish trend could extend toward 1.1600–1.1620 if the 1.1560 level solidifies as support. Conversely, a sustained break below 1.1500 would weaken the bullish outlook.

Key events for EUR/USD:

• Today at 09:00 (GMT+3): German Factory Orders
• Today at 10:30 (GMT+3): Germany S&P Global Construction PMI
• Today at 15:30 (GMT+3): US Initial Jobless Claims

GBP/USD

GBP/USD is exhibiting a comparable pattern, consolidating between 1.3420 and 1.3480 following last week's sharp rally. A decisive break above 1.3480 could open the door to a retest of the July high near 1.3560. Conversely, stronger-than-expected US economic data could drive the pair back toward the 1.3350–1.3400 range.

Key events for GBP/USD:

• Today at 11:30 (GMT+3): UK Construction PMI
• Today at 18:30 (GMT+3): Atlanta Fed GDPNow estimate
• Tomorrow at 15:30 (GMT+3): US ADP Private Non-Farm Employment Change

Outlook

The official US Nonfarm Payrolls report stands as the marquee event for currency markets this week. Employment growth, the unemployment rate, and wage data will give investors a clearer read on the strength of the US economy and help shape expectations for future Federal Reserve policy. Should the figures confirm additional signs of labour market cooling, the dollar could face renewed pressure, allowing EUR/USD and GBP/USD to build on their recent gains. Conversely, stronger-than-expected data could revive demand for the US dollar and trigger a correction in both European currencies.