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Scotiabank strategists Shaun Osborne and Eric Theoret report EUR/USD is flat in North American trade after touching a one-week high, with fundamentals supported by firmer European Central Bank (ECB) rate expectations on higher Oil prices. Markets fully price a 25 bp hike this Thursday and another in December. They anticipate a hawkish hike and see limited resistance until the 1.1680/1.1700 area, with support below 1.1580.

ECB pricing underpins tentative Euro recovery"The EUR is entering Wednesday’s NA session unchanged vs. the USD following an overnight push to a fresh one week high. Fundamentals remain supportive as ECB rate expectations firm in response to the latest rally in oil prices, reflecting the ECB’s greater sensitivity to energy price risks in the current environment."

"A 25bpt rate hike is fully expected at Thursday’s meeting, and another 25bpts has been priced in for December. We anticipate a hawkish hike tomorrow, as President Lagarde unveils the latest forecast and signals ongoing concern about upside risk."

"In terms of data, releases have been limited to second-tier French industrial production data delivering an unexpected contraction in July. There are no major top-tier releases scheduled ahead of next week’s ZEW sentiment figures."

"Neutral/bullish – the latest recovery in the EUR is tentative and negligible, but there nonetheless as spot tests marginal one week highs in the mid-1.16s. The RSI is in the upper 50 area and climbing, leaning toward further near term gains."

"The 200 day MA (1.1634) looks to have provided modest closing resistance over the past week or so, however we note the absence of any meaningful resistance ahead of the 1.1680/1.1700 area. Near-term support is expected below 1.1580."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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The EUR/USD pair attracts fresh buyers during the Asian session on Wednesday, though it lacks bullish conviction and remains confined within the weekly range. Spot prices currently trade near the 1.1630 region, up around 0.05% for the day, as bulls opt to wait for the European Central Bank (ECB) meeting and crucial US inflation figures.

A 25 basis point (bps) rate hike by the ECB on Thursday is considered a done deal, suggesting that the focus will be on the central bank's outlook amid elevated inflation risks. Traders will then confront the release of the US Producer Price Index (PPI) and the Consumer Price Index (CPI) on Thursday and Friday, respectively, which might offer cues about the Federal Reserve's (Fed) policy path. In the meantime, September Fed rate hike bets remain in play, which, along with geopolitical uncertainties, could support the US Dollar (USD) and cap gains for the EUR/USD pair.

From a technical perspective, spot prices hold a constructive short-term bias above the 200-period Exponential Moving Average (EMA) on the 4-hour chart, at 1.1579, and the 38.2% Fibonacci retracement of the 1.1323–1.2072 upswing at 1.1609. Moreover, the Relative Strength Index (RSI) near 58 and a slightly positive Moving Average Convergence Divergence (MACD) reading hint that bullish momentum persists, though not in overstretched territory.

Meanwhile, initial resistance is aligned at the 50.0% retracement at 1.1698, followed by the 61.8% level at 1.1786, with higher barriers at 1.1912 and the 1.2072 swing high. On the downside, immediate support is seen at the 38.2% retracement at 1.1609, ahead of the 200-period EMA at 1.1579. A convincing break below these would expose the 23.6% retracement at 1.1500 and the 1.1323 cycle low.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

EUR/USD 4-hour chart

ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.

FX analysts see improving yield support for the Euro ahead of Thursday’s ECB decision, with resistance at 1.1680-1.1700. The Euro to Dollar (EUR/USD) exchange rate recovered from earlier losses to trade near 1.1626 on Tuesday afternoon, holding Monday’s gains as expectations of an ECB rate increase supported the single currency.

EUR/USD was virtually unchanged on the day at the time of writing, having risen 0.12% on Monday.

Latest — Exchange Rates:

Euro to Dollar (EUR/USD): 1.162453 (-0.03%)

Pound to Dollar (GBP/USD): 1.355083 (+0.03%)

Dollar to Yen (USD/JPY): 154.0889 (+0.17%)

Scotiabank maintains a neutral-to-bullish short-term outlook, with improving interest-rate differentials supporting its assessment.

“The outlook for relative central bank policy remains supportive as we note the continued recovery in yield spreads with a narrow (2Y Germany-US yield spread only) fair value estimate currently around 1.1650.”

That estimate sits modestly above the latest exchange rate, although it measures only the relationship with two-year German and US yields rather than providing a broader price target.

ECB Guidance Could Determine the Next Euro Move Scotiabank expects a widely anticipated 25-basis-point hike at Thursday’s ECB monetary policy meeting, alongside a relatively hawkish message on energy-driven inflation risks.

With an increase already priced in, the scope for further Euro gains may depend more on guidance about subsequent decisions, as we explored in our latest coverage of ECB expectations.

Options pricing has also become less defensive.

“Risk reversals are actually up on the day, suggesting a fading premium for protection against EUR weakness,” Scotiabank said.

The bank reported little currency reaction to Sunday’s German state election result, while stronger German trade figures were offset by a disappointing French deficit.

Image: EUR/USD last 48hr chart Scotiabank describes the medium-term trend as bullish following the recovery from late June, although its longer-term assessment remains range-bound and the RSI is only marginally above neutral.

“We see near-term support around last week’s lows near 1.1580 and see limited resistance ahead of the 1.1680/1.1700 range.”

Those resistance levels precede the higher 1.18-1.20 area in UBS’s Euro-Dollar outlook.

Thursday’s decision and accompanying guidance will test whether improving yield support is enough to carry the EUR/USD exchange rate towards 1.1700.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

EUR/USD trades virtually flat near 1.1623 during American trading hours on Tuesday. The US Dollar (USD) struggles to hold its earlier gains, helping the Euro (EUR) recover from its intraday low.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.82 after briefly reclaiming 99, hovering near its lowest level in more than two weeks.

The Greenback struggles to gain traction despite hawkish Federal Reserve (Fed) expectations. Escalating tensions in the Middle East do little to revive defensive demand for the currency, which is largely weighed down by the sharp rise in the Japanese Yen (JPY).

Fresh hostilities in the Middle East keep Oil prices elevated, adding to inflation concerns and strengthening the case for tighter monetary policy. The US Producer Price Index (PPI) on Thursday and Consumer Price Index (CPI) on Friday will be the next major test for the Fed ahead of its policy decision.

According to the CME FedWatch Tool, markets see around a 60% chance that the Fed will raise interest rates by 25 basis points at its September 15-16 meeting.

On the Euro side, attention is firmly on the European Central Bank’s (ECB) interest-rate decision on Thursday. The ECB is widely expected to raise its deposit rate by 25 basis points to 2.50%, with markets fully pricing in the move. This would be its second rate increase this year after the June hike.

Eurozone inflation accelerated to 3.3% in August from 2.9% in July, largely due to higher energy prices. As the rate hike is already priced in, the Euro’s reaction could depend more on President Christine Lagarde’s comments and the ECB’s updated economic projections. Traders will look for signs of whether policymakers are considering another increase after September or plan to pause.

Analysts at ING highlight that the latest data revisions have reinforced the Eurozone’s growth narrative, with second-quarter output "revised up from 0.4% to 0.6% QoQ, driven by stronger Irish growth on the back of robust multinational performance." They note that, more broadly, "Europe’s resilience despite geopolitical developments and higher commodity prices remains a key theme of the summer and has likely helped keep the euro relatively expensive."

Even so, ING maintains a cautious stance on the currency pair, stressing that "our short-term downside preference in EUR/USD is still mainly driven by our USD view and expectation of a September Fed hike." The bank adds that "the latest rise in energy prices adds further support" to this bias, reinforcing their view that the Euro’s current strength may prove difficult to sustain in the near term.

ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.

ING’s Francesco Pesole notes that stronger second-quarter Eurozone growth and resilience to geopolitical and commodity shocks have kept the Euro (EUR) relatively expensive. However, he maintains a short-term downside bias in EUR/USD driven by expectations of a September Fed hike and worsening Eurozone terms of trade, seeing a move towards 1.150 over coming weeks as a realistic scenario ahead of a potentially dovish European Central Bank (ECB) meeting.

Euro resilience but softer path seen"Second-quarter eurozone growth was revised up from 0.4% to 0.6% QoQ, driven by stronger Irish growth on the back of robust multinational performance."

"More broadly, Europe’s resilience despite geopolitical developments and higher commodity prices remains a key theme of the summer and has likely helped keep the euro relatively expensive."

"Our short-term downside preference in EUR/USD is still mainly driven by our USD view and expectation of a September Fed hike. That said, the latest rise in energy prices adds further support."

"Real-time estimates suggest the eurozone’s commodity terms of trade are now worse than at the previous low in March."

"Ahead of Thursday’s ECB meeting, we see some dovish risks given the market’s aggressive tightening expectations. In that context, a move towards 1.150 over the coming weeks remains realistic in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius

Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.

The EUR/USD enters a potentially decisive week with monetary policy on both sides of the Atlantic once again driving the currency pair. The European Central Bank is widely expected to raise interest rates on September 10, while the release of U.S. inflation data on September 11 could determine whether the Federal Reserve follows with a rate hike of its own next week.

The ECB decision is largely anticipated, meaning the market reaction could depend less on the 25-basis-point move itself and more on the central bank’s guidance about what comes next. In the United States, meanwhile, the August consumer-price index could change expectations for the September 15-16 Federal Reserve meeting. That creates scope for increased volatility in the EUR/USD pair, particularly because the FX pair seems to be consolidating after a rebound.

Daily EURUSD Chart - Source: ActivTraderECB and Fed policy divergence could drive EUR/USD volatilityEurozone inflation accelerated to 3.3% in August from 2.9% in July, according to Eurostat’s preliminary estimate, marking its highest level since September 2023. The increase was largely driven by energy prices, with energy inflation accelerating to 14.3% from 10.3%. Core inflation, however, eased slightly to 2.4% from 2.5%. 

This release has strengthened expectations that the ECB will continue tightening monetary policy despite the risk that higher energy costs could weigh on economic activity. All 65 economists surveyed by Reuters expected the ECB to raise its deposit rate by 25 basis points to 2.50% on September 10.

The hike itself, therefore, should not come as a major surprise to markets. Instead, traders are likely to concentrate on ECB President Christine Lagarde’s communication and the updated economic projections. The key question is whether the ECB considers September’s increase the end of the tightening cycle or whether it leaves the door open to additional hikes. This distinction could prove important for the EUR/USD’s trajectory. 

Reuters’ latest economist poll found that 91% of respondents expect the deposit rate to finish 2026 at 2.50%, while 78% expect it to remain there through the middle of 2027. Interest-rate markets, however, have been more hawkish and have been pricing the possibility of another increase.

The energy shock makes the ECB’s communication particularly important. Continued geopolitical tensions and elevated oil and gas prices could keep headline inflation above target for longer, potentially forcing policymakers to maintain a restrictive stance. Economists surveyed by Reuters now expect eurozone inflation to return to the ECB’s 2% target only toward the end of 2027.

For the euro, a clearly hawkish ECB could therefore provide support, particularly if policymakers signal that another rate increase remains possible.

The other side of the EUR/USD equation is the Federal Reserve.

The U.S. August employment report has already complicated the picture. Nonfarm payrolls increased by 162,000 in August, significantly exceeding expectations, while the unemployment rate remained at 4.1%. Additionally, the change for July was revised up, from -23,000 to +21,000. The stronger labour-market figures pushed market expectations for a September Fed hike higher. Reuters reported that fed funds futures were pricing a roughly 57% probability of an increase late on Friday.

That leaves the August CPI report as a potentially decisive catalyst. The U.S. Bureau of Labor Statistics is scheduled to publish the figures on Friday, September 11. July CPI showed annual inflation at 3.4%, while core inflation stood at 2.5%. Economists surveyed by Reuters expect August CPI to rise 0.4% month-on-month, with core CPI increasing 0.2%.

A hotter-than-expected inflation reading could reinforce expectations for a September Fed hike and potentially strengthen the dollar. Conversely, evidence that underlying inflation is continuing to moderate could reduce the probability of immediate tightening, weighing on the dollar and potentially supporting the EUR/USD.

The CPI report arrives only days before the Fed’s September 15-16 meeting, leaving little room for markets to ignore the data. Fed Governor Christopher Waller has already indicated that he would favour keeping rates unchanged if the upcoming inflation figures confirm that price pressures are cooling.

EUR/USD daily technical outlookThe pair has recovered significantly from its summer lows, rebounding by roughly 3.13% from around 1.1355. This recovery allowed the EUR/USD to break above the Ichimoku cloud on the daily chart. However, the rebound has lost momentum around the 1.1674 area. The EUR/USD is currently trading near 1.1611 and appears to have entered a consolidation phase, with the pair broadly confined between resistance around 1.1674 and support near 1.1559.

Daily EUR/USD Chart - Source: ActivTraderThis range could become particularly important as the ECB and U.S. CPI approach. A sustained break above 1.1674 would represent a significant technical development. It would indicate that buyers have regained control after the recent consolidation and could open the way toward higher levels.

A break below 1.1559, by contrast, would weaken the current bullish structure and suggest that the recent recovery is losing momentum. Such a move could expose the pair to further downside as traders reassess the sustainability of the summer rebound.

Momentum indicators provide a relatively neutral signal at present. The 14-period Relative Strength Index is around 53.94, keeping it slightly above the key 50 threshold but without real moment or heading towards overbought territory. The RSI has also struggled to extend higher after approaching an ascending support trendline that has developed from the oversold low reached at the end of June. This suggests that neither buyers nor sellers currently have a decisive advantage.

The Ichimoku configuration nevertheless remains worth monitoring. The earlier move above the daily cloud improved the medium-term technical picture, but the failure to establish a sustained move above 1.1674 means confirmation is still lacking. For traders, the coming economic events could therefore provide the catalyst needed to break the current range.

Source: MorningStarA hawkish ECB combined with softer-than-expected U.S. inflation would represent the clearest bullish combination for the EUR/USD. Such a scenario could increase expectations for further ECB tightening while simultaneously reducing the probability of a near-term Fed hike, narrowing the expected interest-rate differential between the euro and dollar.

The opposite combination would be potentially bearish for the pair. A hawkish ECB that is fully priced in, followed by stronger-than-expected U.S. inflation, could revive expectations for Fed tightening and strengthen the dollar. In that scenario, the 1.1559 support level could come under significant pressure.

There is also a third possibility: both central banks could deliver hawkish signals. If the ECB raises rates but signals that September could be its final move, while U.S. inflation remains elevated, the dollar could regain an advantage despite the ECB’s tightening. 

The ECB decision may establish the initial direction, but U.S. inflation could ultimately determine whether the pair breaks out of its current range. With EUR/USD trading close to the middle of the 1.1559-1.1674 range, the market seems to be waiting for a catalyst. The key levels to watch: 1.1674 on the upside and 1.1559 on the downside. A decisive break of either boundary could provide a stronger signal about the next directional move. 

Until then, traders should expect potentially intraday swings around the ECB decision, U.S. PPI and Friday’s CPI release. With monetary-policy expectations finely balanced on both sides of the Atlantic, the EUR/USD could be particularly sensitive to even relatively small surprises in the data.

EUR/USD trades near 1.1627 on Tuesday after a US jobs report that came in almost three times above forecast. The data supported the dollar and strengthened expectations of tighter Federal Reserve policy. Attention now shifts to the European Central Bank meeting on 10 September, where the rate increase is already fully priced in, and the guidance that follows will determine the euro's next move.

US jobs data put the Dollar back on the front footThe US labour market delivered its strongest month since March. Nonfarm payrolls rose by 162,000 in August against a market forecast of around 56,000. The unemployment rate held at 4.1%, average hourly earnings rose 3.1% year-on-year, and the Bureau of Labor Statistics revised June and July higher by a combined 55,000, turning July's previously reported job loss into a gain.

Nonfarm payrolls measure how many paid jobs the US economy added during the month, excluding farm work. They provide one of the clearest monthly indications of how much room the Fed has to adjust interest rates.

A labour market this resilient takes the pressure off the Fed to support growth and leaves inflation as its main concern. After the release, money markets raised the probability of a September rate increase to around 58%, up from roughly 52% before the data. Higher expected US rates make dollar deposits more attractive, so the dollar gained ground and EUR/USD settled into a narrow range.

Why the ECB meeting matters more than the decision itselfAll 65 economists polled by Reuters expect a 25-basis-point increase in the deposit rate to 2.50%. A basis point is one hundredth of a percentage point, so 25 basis points equal 0.25%. Money markets are pricing in the same outcome with near-full certainty and expect the deposit rate to rise further, reaching around 3.00% by June 2027. That implies two more increases after this week.

When an outcome is fully priced in, the decision itself rarely moves the market. The euro will take its cue from the press conference. Eurozone inflation accelerated to 3.3% in August, driven largely by energy costs, and Christine Lagarde has already identified the energy shock as an upside risk to prices.

That leaves one open question for Thursday. If Lagarde confirms that further tightening remains under discussion, the euro could gain support against a dollar that is also pricing in higher rates, with EUR/USD potentially testing 1.1655, the upper edge of its current range. If she delivers the rate increase and keeps every option open without committing to a path, the rate outlook remains in the dollar's favour, and the pair could move towards 1.1525.

German factory orders add a second layerNew orders in German manufacturing rose 2.5% in July after an upwardly revised 3.7% increase in June. The market expected 0.3%, and this was the third consecutive monthly increase.

The detail matters for anyone trading the euro. Excluding large-scale contracts, orders fell 1.4% from June. Domestic orders jumped 9.1% while foreign orders fell 2.1%, with demand from outside the euro area down 10.1% and demand from inside the bloc up 12.1%. Most of the headline strength came from shipbuilding, rail and aircraft contracts.

German industry is recovering, but that recovery currently relies on a small number of large contracts and on demand from within Europe. For the ECB, this supports the case that the economy can absorb higher rates.

EUR/USD technical analysis

On the four-hour chart, EUR/USD is building a consolidation range around 1.1620. An upward move towards 1.1655 remains on the table, with a decline towards 1.1525 seen as the following stage.

The MACD indicator supports this reading. MACD compares two moving averages of price and shows whether momentum is building or fading. Its signal line sits above zero and points firmly upwards, reflecting bullish momentum with room for the move higher to continue in the near term.

On the hourly chart, the market has completed a downward wave to 1.1620. The pair is now consolidating above that level. The working scenario for today is another upward leg towards 1.1655.

The Stochastic oscillator supports this view. The Stochastic oscillator shows where the current price sits within its recent trading range. Its signal line is above 20 and points upwards towards 80, indicating that the move higher still has room to develop.

ConclusionEUR/USD enters the ECB week with the technical picture pointing towards 1.1655 in the near term, while the fundamental picture stays split between two central banks moving in the same direction. The rate increase to 2.50% is already priced in, so the euro's next move depends on the guidance that follows.

While the pair holds above 1.1620, the upside scenario remains the working one, with 1.1525 the level to watch further out should the move higher fail to hold. The US inflation report due next week will be the next catalyst on the dollar side of the pair, so the levels set this week are likely to be tested again quickly. Traders who want to follow the reaction in real time can place both levels on the chart in advance and watch how EUR/USD behaves around them during the decision.

EUR/USD 070926 4h Chart EUR/USD gained some ground despite the disappointing Industrial Production report from Germany. The report showed that Industrial Production decreased by -1.1% month-over-month in July, compared to analyst forecast of +0.1%.

Traders also focused on the results of elections in Germany’s Saxony-Anhalt, which ended in a massive win for the anti-immigration Alternative for Germany. The AfD party reached its best result ever, raising worries about its potential success at a federal level.

AfD’s victory in Saxony-Anhalt is a big deal for Germany’s political scene, but I do not think that it will have a material impact on the dynamics of the European currency in the near term. That said, political shifts in Europe are always worth watching.

In case EUR/USD stays above the 1.1615 level, it will head towards the next resistance level, which is located in the 1.1685 – 1.1700 range.

GBP/USD Tests Resistance At 1.3550 – 1.3565

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The Euro (EUR) is marginally higher to near 1.1625 against the US Dollar (USD) during the European trading session on Monday. The major currency pair trades broadly sideways amid an extended weekend in the United States (US) due to Labor Day.

This week, the major trigger for the major currency pair will be the European Central Bank’s (ECB) monetary policy announcement on Thursday and the release of the United States (US) Consumer Price Index (CPI) data on Friday.

Euro focus turns to ECBAccording to Deutsche Bank, the upcoming ECB policy decision on Thursday will be “the key event” for European markets. The bank’s European economists “expect a 25bp rate increase, taking the deposit rate to 2.50%,” and they note that investors will be closely watching “any guidance regarding the likelihood of further tightening” beyond this week’s move.

On the US Dollar front, investors will pay close attention to the US CPI data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.

Meanwhile, upbeat US Nonfarm Payrolls (NFP) data has prompted Fed’s interest rate hike expectations.

Strategists at BNY highlight that last week’s upside surprise in U.S. labour data, with "nonfarm payrolls (NFP) at 162,000 vs. the expected 55,000," pushed "market-implied odds of a September Fed hike back up to around 60% from 50%," underscoring "how much rate expectations remain tethered to the data backdrop.

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1623, keeping a modest bullish tone as it holds above the 20-day Exponential Moving Average (EMA) at 1.1600.

The pair consolidates after its recent advance, and the Relative Strength Index (RSI) around 56 suggests constructive but not overextended upside momentum.

On the downside, immediate support emerges at the 20-day EMA near 1.1600, with a break below this level likely to weaken the current upward bias and open the door to a deeper pullback towards the psychological level of 1.1500. Looking up, the August high at 1.1713 is the immediate resistance level, followed by the April high at 1.1849.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator ECB Main Refinancing Operations Rate One of the three key interest rates set by the European Central Bank (ECB), the main refinancing operations rate is the interest rate the ECB charges to banks for one-week long loans. It is announced by the European Central Bank at its eight scheduled annual meetings. If the ECB expects inflation to rise, it will increase its interest rates to bring it back down to its 2% target. This tends to be bullish for the Euro (EUR), since it attracts more foreign capital inflows. Likewise, if the ECB sees inflation falling it may cut the main refinancing operations rate to encourage banks to borrow and lend more, in the hope of driving economic growth. This tends to weaken the Euro as it reduces its attractiveness as a place for investors to park capital.

Read more.

Next release: Thu Sep 10, 2026 12:15

Frequency: Irregular

Consensus: 2.65%

Previous: 2.4%

Source: European Central Bank

Danske Research Team reports EUR/USD trading in a narrow 1.1610–1.1620 range after quickly reversing losses from a stronger US jobs report. They highlight a thin data calendar with United States (US) markets closed, and note that attention will shift to the upcoming European Central Bank (ECB) meeting, where a rate hike is widely expected, and to US Consumer Price Index (CPI) figures later in the week.

Pair steadies in tight trading band"In the euro area, retail sales fell by 0.6% m/m in July (cons: 0.2%), following a small increase in June. Fuel sales weighed on the headline figure, but sales excluding fuel also declined by 0.6% m/m, returning to levels seen in Q1."

"The positive growth recorded in July PMIs therefore does not appear to have been driven by private consumption. As consumers remain cautious, companies may find it harder to pass on higher energy costs, which could help explain why these pressures have not spilled over into core inflation."

"In Germany, AfD's victory in Saxony-Anhalt was broadly in line with expectations, winning 44% but falling short of an outright majority. The result confirms AfD's momentum, though mainstream parties rule out a coalition and the direct federal impact is limited."

"EUR/USD is relatively stable in a 1.1610-1.1620 range, as it quickly reversed the initial decline seen after the stronger US jobs report on Friday. "

"The data calendar is thin today as the US market is closed due to Labor Day. Later this week, focus turns to the ECB meeting on Thursday, where a hike is widely expected, and the US CPI figures on Friday."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

The Euro (EUR) trades marginally lower at around 1.1610 against the US Dollar (USD) during the Asian trading session on Monday. The major currency pair edges down as the US Dollar ticks up, with investors turning cautious at the start of the United States (US) Consumer Price Index (CPI) week.

Investors will pay close attention to the US CPI data, which will be released on Friday, to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.

Markets focus on final US inflation prints before Fed decisionAnalysts at Deutsche Bank stress that “all eyes will be on the August US CPI print on Friday, preceded by the PPI on Thursday,” noting that these releases represent “the last set of inflation readings before the Fed’s next decision on September 16.” Their US economists expect a notable pickup in price pressures, with August’s headline CPI forecast “to come in at +0.38% MoM vs. +0.07% previously,” while they see underlying pressures remaining contained as core CPI is projected “to print +0.21% vs. +0.22%.”

Meanwhile, traders are expected to reassess Fed interest rate expectations soon as the US Nonfarm Payrolls (NFP) data for August has come in stronger-than-expected. The data showed on Friday that the economy created 162K fresh jobs, significantly higher than 56K estimates.

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1609, keeping a mildly bullish near-term tone as it holds above the 100-day Simple Moving Average (SMA) at 1.1563.

The Relative Strength Index (RSI) at roughly 54 stays in neutral territory, hinting that downside pressure persists but without strong momentum exhaustion signals on either side.

On the topside, key resistances are the August high at 1.1679, followed by the April high at 1.1849. Looking down, the 100-day SMA at 1.1563 is the first notable support that bulls need to hold to avoid getting exposed to further downside. Below the 100-day SMA, the psychological level of 1.1500 might act as key cushion for the pair.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Inflation FAQs Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.

The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.

Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.

Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.

Key Highlights

EUR/USD started a fresh increase from the 1.1565 support. It traded above a bearish trend line with resistance at 1.1605 on the 4-hour chart. WTI Crude Oil prices could continue higher if it settles above $92.65. Bitcoin remained supported and might aim for another leg higher. EUR/USD Technical Analysis The Euro corrected gains and tested 1.1565 against the US Dollar. EUR/USD formed a base and started a fresh upward move above 1.1585.

Looking at the 4-hour chart, the pair traded above a bearish trend line with resistance at 1.1605. There was a move above the 100 simple moving average (red, 4-hour), and the pair remained well above the 200 simple moving average (green, 4-hour).

The pair surpassed the 1.1620 resistance but failed near the 50% Fib retracement level of the downward move from the 1.1711 swing high to the 1.1566 low at 1.1640.

There was a minor pullback, but the pair remained well above 1.1565. If there is another decline, the pair might find bids near 1.1585. The first major support could be near 1.1565. A downside break and close below 1.1565 might start a major leg down. In the stated case, the bears could aim for a move to 1.1440.

On the upside, the bears could be active near 1.1640. The next major resistance might be 1.1675. A close above 1.1675 could start another steady increase. In the stated case, the bulls could aim for a move to 1.1710.

Looking at WTI Crude Oil prices, the price remained supported for more gains, and there could be a fresh upward move toward the $95.00 level.

Upcoming Key Economic Events:

Germany’s Trade Balance for July 2026 – Forecast €16.5B, versus €15.4B previous. US NFIB Business Optimism Index for August 2026 – Forecast 99.3, versus 99.8 previous.

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The EUR/USD pair posted a modest comeback after falling in the last week of August, finishing the week just above the 1.1600 level. The US Dollar (USD) lost momentum and corrected lower on Monday, but overall it retained its recently regained strength amid persistent Middle East tensions and speculation that the Federal Reserve (Fed) will have to raise the benchmark interest rate in September. The USD resumed its advance on Friday, as upbeat employment data brought back demand.

United States employment and inflationIn between, the Greenback suffered a minor setback: Fed Governor Christopher Waller cooled the odds for a September rate hike on Thursday by saying that officials can “wait one meeting,” as long as there are no surprises from upcoming inflation data. He also noted that a 25-basis-point (bps) hike won’t bring inflation back to 2%.

The Bureau of Labor Statistics (BLS) will release the August Consumer Price Index CPI) and the Producer Price Index (PPI) for the same month in the upcoming days. Indeed, the CPI may not be the Fed’s favorite inflation gauge, but it's a reliable indicator of inflationary pressures and may define whether the Fed will hike or hold when it meets later this month.

The United States (US) published the August Nonfarm Payrolls (NFP) report on Friday, with upbeat figures backing the USD. The country added 162K new jobs in the month, much better than the anticipated 56K. The Unemployment rate held steady at 4.1% as expected. Furthermore, annual wage inflation, as measured by the change in Average Hourly Earnings, declined to 3.1% from 3.2%.

Other than that, the country published the August ISM Purchasing Managers’ Indexes (PMIs). The manufacturing index eased to 54.6 from 55.6 in July, while the Services PMI improved to 55.4 from 54.1 in the previous month. Within the manufacturing sector, inflation held steady as the Prices Paid Index printed at 71.1, matching the previous monthly reading. On services output, the Prices Paid Index edged higher to 72.6 from 70.3. A reading above 50 means that more businesses are paying higher prices than in the previous month, meaning inflationary pressures are being felt up and down across all businesses.

So, while Fed Governor Waller hinting at an on-hold September decision temporarily took its toll on the USD, the fact is that inflationary pressures are high enough for speculative interest to price in upcoming hikes. Rising energy prices amid the Middle East war are no doubt the main factor driving market concerns, with Crude Oil Prices regaining positive momentum after the US and Iran resumed hostilities in late August.

European Central Bank and Eurozone inflationInflation is not a problem exclusive to the US. Germany reported that the Harmonized Index of Consumer Prices (HICP) rose 2.9% YoY in August, according to preliminary estimates, higher than the previous 2.8% although better than the expected 3.1%. Furthermore, Retail Sales in the country fell 3.4% in July, worsening from a flat reading in July. The Eurozone HICP in the same period printed at 3.3% as expected, rising from the 2.9% posted in July.

The situation is similar; what’s different is how central banks are reacting to the news: the European Central Bank (ECB) has already hiked interest rates by 25 bps and is expected to deliver a similar rate increase when it meets on Wednesday. The move is largely priced in, which means the impact on the Euro could be limited.

The ECB faces yet another challenge: President Christine Lagarde, whose term as the ECB head ends in October 2027, may be due to an early exit. Market talks suggest she would step down before France’s Presidential elections either to participate in them or to allow President Emmanuel Macron to have a voice on Lagarde’s successor at the central bank. Lagarde refrained from confirming or denying such rumors, but left the door open for an early departure.

Other than the ECB decision, the European macroeconomic calendar will include the final estimates of the German and Eurozone HICP.

There’s yet another factor pushing central banks to raise rates. Government bond yields are on the loose amid inflation-related concerns and geopolitical tensions. Higher borrowing costs affect the country’s economy and add to the inflationary process. Central banks’ tools may not be enough to tame the chaos, but inaction from policymakers will make the picture even worse.

By the end of the week, however, US President Donald Trump, once again called for lower rates: “The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!,” he posted on Truth Social, also threatening to stop trade with countries with higher rates.

Indeed, President Trump’s desire for lower rates is probably the main reason why Chair Kevin Warsh has refrained from hiking rates despite pledging multiple times to fight inflation. The Fed is between a rock and a hard place.

EUR/USD Technical Outlook:

From a technical point of view, the daily chart shows EUR/USD trading with a neutral-to-slightly bullish tone as it consolidates between nearby moving averages. The pair is trading above the 20-day Simple Moving Average (SMA) at 1.1608 and the 100-day SMA at 1.1564, which together suggest a tentative underlying bid, while it remains capped by the 200-day SMA at 1.1634. Momentum fades, with the 14-day Relative Strength Index (RSI) indicator easing at around 56 and the 14-period Momentum indicator nearing its midline from above, suggesting buyers are losing interest.

On the weekly chart, EUR/USD trades above the 20-, 100-, and 200-week SMAs, with the shortest SMA at 1.1562 providing immediate dynamic support. The broader price placement comfortably above the 100-week SMA at 1.1337 and the 200-week SMA at 1.1075 suggests the medium-term uptrend remains intact, yet technical indicators, holding around their midlines and directionless, suggest investors are unwilling to take stronger positions.

On the topside, immediate resistance is at the 200-day SMA around 1.1634; a daily close above this barrier would open the way for a retest of recent highs in the 1.1710 region, ahead of the 1.1800 threshold. On the downside, initial support is seen at the 20-day SMA near 1.1608, with the 100-day SMA at 1.1564 providing a deeper cushion if the pair slips back. A break beneath this latter level would likely open the door for a steeper decline, with 1.1470 as the next level to watch.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator ECB Monetary Policy Statement At each of the European Central Bank’s (ECB) eight governing council meetings, the ECB releases a short statement explaining its monetary policy decision, in light of its goal of meeting its inflation target. The statement may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. A hawkish view is considered bullish for EUR, whereas a dovish view is considered bearish.

Read more.

Next release: Thu Sep 10, 2026 12:15

Frequency: Irregular

Consensus: -

Previous: -

Source: European Central Bank

$1.16135

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EUR/USD slides after strong US jobs data as USD/JPY tests a major swing low and USD/CAD surges following a sharp Canadian employment miss.

In this article:EUR/USD

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EUR/USD ForecastUSD/JPY

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USD/JPY ForecastUSD/CAD

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USD/CAD Forecast

EUR/USD Technical Analysis

EUR/USD price chart showing price at 1.16006, trading below the 50 EMA (1.16133) and the 200 EMA (1.16155). Source: TradingView The euro has plunged after the much stronger-than-anticipated jobs number coming out of the United States, sending it all the way down to basically 1.1585 or so before bouncing. I think we now have a range-bound market that doesn’t really know what to do. I currently have this range between yesterday’s point where I said I would be a seller at 1.1640 and the bottom here at 1.1580.

I do favor, I suppose, the downside from a longer-term standpoint still, but this is a market that, at least in the short term, probably is going to bounce around. Keep in mind Monday is a holiday in the United States.

USD/JPY Technical Analysis

USD/JPY price chart showing price at 155.732, trading below the 50 EMA (156.968) and the 200 EMA (158.518). Source: TradingView The dollar-yen is suddenly a lot more interesting to me. This is a major swing low that we find ourselves testing again. It was interesting that the initial reaction was to go to the upside. Makes sense: interest rate spike. I think there’s a real chance of a bounce here, but having said that, there’s a lot of fear out there about the Bank of Japan. I think longer term, the Bank of Japan has very limited options, but it is an interesting turnaround.

So, I’ll be watching this today to see how it plays out. We can see that it is getting pretty aggressive. I think somebody’s trying to keep this from popping higher based on the action that I see right now. That being said, if we take out the top of this candlestick, that’d be pretty bullish.

USD/CAD Technical Analysis USD/CAD price chart showing price at 1.38654, bouncing sharply above the 200 EMA (1.38508). Source: TradingView The dollar against the Canadian dollar is just screaming higher. Not a huge surprise; there are a lot of things working against Canada right now, not the least of which is the United States. Canadian employment came in at -41,000 as opposed to the supposed addition of 15,000, so that’s a huge miss for Canada; it’s a huge gain for the United States. The trade war going on at the same time, of course, has major ramifications as well. I am bullish, looking at short-term pullbacks as buying opportunities.

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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

Latest news and analysis

Editors’ Picks

EUR/USD rose to 1.1627. The US dollar fell sharply yesterday and remains under pressure today. Pressure on the US currency intensified after a Federal Reserve official made more dovish comments, prompting markets to scale back expectations for a September rate hike.

Federal Reserve Governor Christopher Waller stated that he would support keeping rates unchanged if price pressures continue to ease. According to him, the next policy decision will largely depend on August inflation data, due for release next week.

Markets now put the probability of a September rate hike at approximately 50%, down from around 63% the previous day. Friday’s US labour market report for August will provide another important signal and could significantly shift market expectations for Fed policy.

Another factor weighing on the dollar has been the yen’s sharp appreciation. Investors are monitoring the risk of currency intervention while also assessing the likelihood of more aggressive Bank of Japan policy tightening before year-end.

Technical Analysis

On the H4 chart of EUR/USD, the market is moving lower towards 1.1611. A consolidation range is currently forming around this level. A move higher towards 1.1657 is possible, followed by a further decline to 1.1555. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downward, indicating continued bearish momentum and scope for further downside.

On the H1 chart, the market has completed another downward move to 1.1625. A consolidation range is currently forming around this level. A move lower towards 1.1611 is expected today, followed by a rebound to 1.1657. The Stochastic oscillator supports this scenario, with its signal line below 50 and pointing firmly downward towards 20.

Conclusion EUR/USD has gained ground as the dollar retreats following dovish comments from Fed Governor Christopher Waller, who signalled a preference for keeping rates unchanged if inflation continues to ease. The implied probability of a September rate hike has fallen from 63% to 50%, with markets now focused on Friday’s US jobs report and next week’s inflation data for further guidance. The sharp appreciation of the yen has also contributed to dollar weakness, as investors weigh intervention risks and the prospect of more aggressive BoJ tightening. Technically, the pair may see a near-term bounce towards 1.1657 before resuming its broader bearish trend towards 1.1555. The US labour market report will be the key catalyst for the next directional move.

Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

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Today, 4 September, the market’s main focus is the August US employment report. According to CNBC, the consensus forecast calls for just 53,000 nonfarm jobs to be added following July’s decline, highlighting the continued weakness of the labour market. At the same time, the Federal Reserve’s focus is shifting towards inflation risks. In the eurozone, a Reuters poll showed that all 65 economists surveyed expect the ECB to raise its deposit rate by 25 basis points to 2.50% at its 10 September meeting, while around 91% expect the rate to remain at that level through the end of the year.

Technical Analysis of EUR/USD

On 21 August, a peak formed around 1.1700 on the four-hour chart, from which a trend and a descending trendline developed. The price repeatedly rejected this trendline to the downside, eventually reaching a low of 1.1570 on 2 September. The following day, the trendline was broken to the upside on increased volume, and the price is now attempting to establish itself above it, as well as above the upper boundary of the current market profile at 1.1610.

A red resistance area is located around 1.1660 above the established market density. In the event of a false breakout followed by a further decline, the asset could trade within the market density or continue lower. However, for this to happen, the price would need not only to test the upper boundary but also break through the Point of Control (POC) at 1.1600 and the lower boundary of the profile at 1.1580. Just below the lower boundary of the profile, there is also a green support area around 1.1570.

The RSI + MAs indicator is showing readings of 58, 45 and 45. The oscillator has moved above the neutral zone, while both moving averages remain red and close to its lower boundary, so they are not yet confirming the breakout.

Key Takeaways The divergence between the RSI and its moving averages leaves the sustainability of the recovery uncertain, and the market may need more time for the other components of the breakout to develop. The August US employment report could provide an additional catalyst for the pair over the coming hours, with its significance for the Fed’s September decision having increased further against the backdrop of an expected ECB rate hike.

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The Euro (EUR) holds onto previous day’s gains at around 1.1630 against the US Dollar (USD) during the Asian trading session on Friday. The major currency pair gained significantly on Thursday as the US Dollar faced sharp selling pressure, following dovish remarks from Federal Reserve (Fed) Governor Christopher Waller.

At press time, the US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, trades close to Thursday’s low near 99.00.

Fed’s Waller didn’t rule out the possibility of hiking interest rates this month if inflation figures come in hot, but his remarks that he is “finally seeing some signs of disinflation in recent data”, indicated that he could incline towards maintaining the status quo.

Meanwhile, investors await key United States (US) Nonfarm Payrolls (NFP) data for August, which will be published at 12:30 GMT.

In the daily chart, EUR/USD trades at 1.1630. The pair holds above the 100-day simple moving average (SMA) at 1.1564, keeping the near-term bias mildly bullish as recent gains remain supported by this underlying trend indicator.

The Relative Strength Index (RSI) around 57 suggests positive but not overstretched momentum, hinting that buyers retain the upper hand while avoiding overbought conditions.

On the downside, initial support is seen at the 100-day SMA near 1.1564, where a break would expose a deeper pullback toward prior daily lows. Looking up, the major currency pair could extend its upside towards the August high at 1.1720.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

$1.16238

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EUR/USD, USD/CAD and USD/CHF forecast: Key reversal setups emerge as the dollar weakens ahead of NFP, with 1.1640, 1.3780 and 0.8050 in focus.

In this article:EUR/USD

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EUR/USD ForecastUSD/CAD

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USD/CAD ForecastUSD/CHF

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EUR/USD Technical Analysis

EUR/USD price chart showing price at 1.16260, trading above both the 50 EMA (1.15961) and the 200 EMA (1.16130). Source: TradingView The Euro rose quite a bit in early trading on Thursday, but with the jobs report coming out, I’m watching the 1.1640 level. That was where we had seen that massive sell-off. I’m looking for signs of exhaustion to short this. Now, I don’t want to get married to this position. This is not going to be a long-term position by any stretch of the imagination, but I think it’s difficult to imagine a market that’s just truly going to fly ahead of that Nonfarm Payroll announcement. It could, obviously, but I’m looking for signs of exhaustion to start shorting.

USD/CAD Technical Analysis USD/CAD price chart showing price at 1.37935, trading below both the 50 EMA (1.38520) and the 200 EMA (1.38648). Source: TradingView The dollar against the Canadian dollar has fallen pretty significantly over the last couple of days, but we have a gap down here at 1.3780 that I’m watching very closely. If we get a bounce from here, I’m willing to go long. Now, keep in mind both of these countries produce their jobs report at the same time on Friday morning, so I’ll be out of this position no matter what it does before then.

With that being said, as long as we get some type of bounce, I’m willing to play that V-shaped pattern here as the interest rate differential continues to favor the United States despite the fact that rates have dropped a little bit early in the session.

USD/CHF Technical Analysis USD/CHF price chart showing price at 0.80707, breaking below the 200 EMA (0.80846) and the 50 EMA (0.81103). Source: TradingView Finally, the USD/CHF pair. This is one I’ve been long for a very long time. It is falling apart. Again, like the Euro, I’m kind of watching to see a little bit of exhaustion somewhere right around the 0.8050 level. I’ll be watching to see if we get a bounce. That’s a place I could go long. But again, I don’t want to be in the dollar when the Nonfarm Payroll announcement comes out. So all of these will be very short-term trades at best.

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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

Latest news and analysis

The Euro (EUR) is up 0.2% to near 1.1610 against the US Dollar (USD) during the European trading session on Thursday. The major currency pair gains as the US Dollar underperforms due to multiple headwinds, weak United States (US) ADP Employment Change data for August and the Federal Reserve (Fed) pushing back upside inflation risks.

US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHFUSD-0.18%-0.04%-1.58%-0.30%-0.32%-0.30%-0.49%EUR0.18%0.14%-1.40%-0.17%-0.13%-0.18%-0.31%GBP0.04%-0.14%-1.54%-0.30%-0.27%-0.29%-0.45%JPY1.58%1.40%1.54%1.29%1.29%1.26%1.11%CAD0.30%0.17%0.30%-1.29%-0.01%-0.03%-0.19%AUD0.32%0.13%0.27%-1.29%0.01%-0.02%-0.16%NZD0.30%0.18%0.29%-1.26%0.03%0.02%-0.11%CHF0.49%0.31%0.45%-1.11%0.19%0.16%0.11% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Market experts believe that soft US ADP Employment Change data has set a challenging stage for the Nonfarm Payrolls (NFP) data scheduled for Friday.

US labor signals stay soft as ADP underwhelms ahead of NFPBrown Brothers Harriman’s Elias Haddad points out that the latest US labor market read from ADP did little to dispel concerns about cooling demand. He notes that “the ADP August private payrolls data showed labor demand remains unimpressive,” with the economy adding “+38k private sector jobs in August (consensus: +47k) vs. +46k in July, the lowest reading since January.” Haddad cautions, however, that “the correlation between monthly change in ADP private payrolls and nonfarm payrolls (NFP) is weak,” limiting the extent to which investors can extrapolate the ADP miss into Friday’s official employment report.

Else, New York Fed Bank President John Williams said on Wednesday that “inflation expectations are contained”, and “recent data on price pressures has been encouraging", have increased doubts over upside inflation risks. The comments from Fed’s Williams at a time when market participants are worried about upside inflation risks, following remarks from Fed Chairman Kevin Warsh at the Jackson Hole Symposium, could ease fears of high inflation expectations.

On the Eurozone front, the latest Reuters poll has shown that all 65 economists surveyed said that the European Central Bank (ECB) will hike its deposit rate by 25 basis points (bps) to 2.50% in the monetary policy announcement on September 10.

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1611. The pair holds a modest bullish near-term bias as spot remains above the 20-period exponential moving average (EMA) at 1.1595, suggesting underlying demand after the recent recovery from mid-1.15s. The Relative Strength Index (RSI) at 55.2 sits in neutral-to-positive territory, hinting that bullish momentum is constructive but not overstretched after pulling back from prior overbought readings above 70.

On the downside, immediate support is seen at the 20-period EMA near 1.1595, which reinforces the 1.16 area as a short-term floor while it holds. A daily close below this EMA would weaken the bullish tone and expose the pair to further downside towards the August 13 low at 1.1512.

On the upside, the 1.1687-1.1714 range will act as a key supply zone for the pair.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator ECB Rate On Deposit Facility One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.

Read more.

Next release: Thu Sep 10, 2026 12:15

Frequency: Irregular

Consensus: -

Previous: 2.25%

Source: European Central Bank

Danske Research Team reports that EUR/USD is around the 1.16 level while European government bond yields continue to climb and US yields show a mixed pattern. Ten-year German yields are up about 50 basis points since early July, with the curve steepening, and US Treasuries have risen nearly 40 basis points, shaping the backdrop for the currency pair.

Pair holds around 1.16 level"European government bond yields continued to rise yesterday, while it was a more mixed picture in the US. 10Y German government bond yields have now risen 50bp since early July, while 10Y Treasuries have risen almost 40bp. The German curve has steepened between 2-10Y as the 2Y German bond has risen 40bp. The US curve has also steepened some 10bp. "

"The final euro area service and composite PMIs for August are released today, which we expect to confirm the flash release. The flash services PMI was unchanged at 51.7 but still came in above expectations. Tuesday's final manufacturing PMI, which makes up 35% of the final composite PMI, showed a solid rebound, with Germany in the driver's seat."

"US final services PMIs for August are due. The August flash release increased markedly for the second month in a row to the highest level since December 2024. The details pointed to solid demand, rising backlogs and firmer hiring, while output charge inflation eased to a six-month low despite still-elevated input cost pressures."

"Also in the US, the Challenger layoff report for August is released. In July, layoff announcements were at their lowest level in two years, while levels are already low from a historical perspective. AI has accounted for around one third of layoffs in recent months."

"In the US, ADP private payrolls increased by 38k in August (cons.: 48k), while the July print was revised slightly higher to 46k from 44k. Sector details were mixed: Education & Health Services, Leisure & Hospitality and Construction had higher payrolls growth than in July, while Manufacturing and Professional & Business services declined by 17k and 16k, respectively."

"The release points to softer hiring momentum ahead of Friday's official jobs report, although ADP has been a poor guide historically to the BLS private payrolls estimate."

"On the wires, Fed's Waller (voter) is expected to speak. In July, Waller mentioned that if core inflation was "hot", FOMC would need to consider tightening policy in the near-term."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

The euro and pound continue to decline, approaching important support levels amid a stronger US dollar. Further moves in EUR/USD and GBP/USD will depend on incoming macroeconomic data, particularly developments in the US labour market.

Today, market attention will focus on economic data from Europe and the US. In the eurozone, services-sector business activity indices will be released, with weaker readings potentially keeping pressure on the euro. In the US, weekly labour-market data will be published, while additional attention will be paid to comments from Federal Reserve representative Christopher Waller. However, tomorrow’s employment report will be the key market reference point. Following the weak ADP reading, further signs of a cooling labour market could strengthen expectations of a more accommodative Fed policy and put pressure on the dollar, while stronger figures could support further dollar gains.

For the pound, domestic data and signals from the Bank of England will provide an additional point of reference. Services-sector business activity figures will be in focus, along with a speech by Bank of England Governor Andrew Bailey, whose comments could influence expectations for the central bank’s future policy.

EUR/USD As expected, EUR/USD has tested the important 1.1580–1.1620 support area. The decline has so far slowed near the upper boundary of the 1.1520–1.1560 range formed in August. Weak eurozone data could push EUR/USD further into this range. A return above 1.1620, followed by a sustained move above this level, would weaken the current bearish scenario and create conditions for a corrective recovery.

Key events for EUR/USD:

today at 10:15 (GMT+3): Spain Services Purchasing Managers’ Index (PMI); today at 10:55 (GMT+3): Germany Composite Purchasing Managers’ Index (PMI); today at 15:30 (GMT+3): US initial jobless claims.

GBP/USD GBP/USD continues to play out the bearish “tower” pattern described earlier. A sustained move below the important 1.3500 support level keeps the risk of further declines towards the 1.3400–1.3440 area. A rebound from this zone could trigger a corrective recovery, while the bearish scenario could be considered invalidated after a sustained move above 1.3560.

Key events for GBP/USD:

today at 11:30 (GMT+3): UK Services Purchasing Managers’ Index (PMI); today at 17:00 (GMT+3): US ISM Non-Manufacturing Purchasing Managers’ Index; tomorrow at 11:50 (GMT+3): speech by Bank of England Governor Andrew Bailey.

Overall, EUR/USD and GBP/USD remain in a downtrend near important support levels, although their further direction will depend on incoming macroeconomic data. Following the weak ADP report, tomorrow’s US employment report will be the key reference point. Further signs of cooling in the labour market could increase pressure on the dollar, while stronger figures could support further dollar gains and lead to continued declines in both currency pairs.

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