The EUR/USD pair has maintained stability around 1.1077 as of Thursday morning, showing a slight increase in value during the previous session. However, it is still trading within a sideways channel. The investors seem to be holding back and conserving their energy in anticipation of crucial employment data from the United States. The ADP private sector jobs report, set to be released today, provides a general sense of market sentiment, although it does not directly correlate with the highly anticipated Nonfarm Payroll (NFP) report on Friday. The market will also keep a close watch on the weekly unemployment claims data release today, as the Federal Reserve is focusing on employment indicators, which could increase the volatility of the EUR/USD pair throughout the day.
The spotlight will soon shift to key employment metrics on Friday, including non-farm payrolls, the unemployment rate, and average hourly earnings for August. These indicators are crucial ahead of the September Fed meeting, as they will play a significant role in determining the Fed’s decision on interest rates. Strong employment data may lead to a minimal 25 basis point rate cut, while weaker labor market figures could increase the likelihood of a 50 basis point reduction.
In terms of technical analysis, the EUR/USD pair is currently consolidating around the 1.1065 level. There is a possibility of testing levels up to 1.1107 today, which could be considered a correction phase within a broader decline. Following this potential rise, a further decline to 1.1060 is expected. A break below this level could indicate a continuation of the downtrend, possibly reaching 1.1016. The MACD indicator supports this bearish outlook, with its signal line below zero and pointing downwards.
On the H1 chart, EUR/USD is continuing to consolidate around 1.1065. There might be a slight dip to 1.1056, followed by an extension towards 1.1107 as part of a corrective pattern. Once this correction phase is completed, the downward trend is likely to resume. The Stochastic oscillator, currently positioned just above 20, suggests a potential rise to 80, indicating a scope for short-term upward movement before continuing the broader bearish trend.
Overall, the EUR/USD pair remains at a critical junction, with investors eagerly watching the upcoming employment data releases to determine the future direction of the currency pair.
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