Title: EUR/USD Dips Toward 1.1720 Following Strong US NFP Data and ECB’s Second Consecutive Rate Pause
Author: Skerdian Meta
Original Source: FX Leaders – “EUR/USD Slips Near 1.1720 as 64K NFP Clash with ECB’s 2% Rate Pause” (December 17, 2025)
The euro slipped further against the US dollar on December 17, 2025, as a stronger-than-expected US Nonfarm Payroll (NFP) report and the European Central Bank’s (ECB) decision to pause interest rate hikes continued to push the EUR/USD currency pair toward key support at the 1.1720 level. Investor sentiment largely favored the dollar after the release of labor market data that exceeded market expectations, while the ECB held its main refinancing rate at 2% for a second consecutive meeting. Together, these events contributed to a broad divergence in monetary policy stances between the Fed and the ECB, applying downward pressure on the single currency.
EUR/USD Technical Movement Overview
In Friday’s trading session, the EUR/USD pair continued its bearish momentum after the release of the US Department of Labor’s latest job report. The pair fell from the weekly high of approximately 1.1785 and edged closer to the 1.1720 support level, indicating that the US dollar remains firmly backed by economic fundamentals.
Key technical observations include:
– The EUR/USD pair broke below its 20-period and 50-period Exponential Moving Averages on the 4-hour chart, indicating bearish short-term momentum.
– Support is now seen near the 1.1715 to 1.1720 region, a zone that previously acted as a short-term demand area in late November.
– The Relative Strength Index (RSI) dipped below 50, suggesting growing selling pressure and declining bullish momentum overall.
Investors now await the next key technical test to see if the 1.1720 support will hold or if a further breakdown will trigger an accelerated decline toward the 1.1650 area.
US Labor Market Surprises with 64K Increase in NFP
The November jobs report released on Friday showed solid hiring activity in the US nonfarm sector. According to the Bureau of Labor Statistics (BLS), employers added 64,000 new jobs in November, significantly surpassing the consensus forecast of 45,000. This positive surprise came at a time when many investors had anticipated a cooldown in the US labor market as a result of restrictive monetary policy from the Federal Reserve.
Detailed breakdown of the labor market report:
– Nonfarm Payrolls increased by 64,000 jobs vs. 45,000 expected
– The unemployment rate remained steady at 3.7%, unchanged from the previous month
– Average hourly earnings rose by 0.3% month-over-month, aligning with market forecasts
– Labor force participation edged slightly higher to 62.8%
These data points reinforced the view that the labor market remains resilient despite high interest rates. With inflation moderating and employment remaining strong, many analysts are now adjusting their forecasts for when the US Federal Reserve may start easing its policy stance.
How the Strong NFP Print Boosted the US Dollar:
The US dollar gained broadly across the board after the NFP data release, as traders increased their bets that the Federal Reserve would delay any interest rate cuts until the latter half of 2026.
– Strong jobs data supported a “higher-for-longer” Fed rate outlook
– US Treasury yields rose, further boosting the dollar’s attractiveness relative to the euro and other major currencies
– Risk sentiment briefly improved, but dollar bulls largely ignored equity gains, focusing more on interest rate differentials
The Fed has repeatedly stressed that its decisions are data-dependent, and Friday’s NFP release will likely lead to a more conservative and gradual monetary easing process. Markets are now pricing in only a 30% chance of a Fed rate cut
Read more on EUR/USD trading.