The EURUSD currency pair is in a state of indecision, oscillating within a sideways market as traders await clarity amid recent economic data and upcoming releases. Disappointing nonfarm payroll figures, coupled with the Federal Reserve's hints at a potential rate cut in September, have set the stage for today's anticipated ISM Non-Manufacturing PMI release. Despite the current sideways trend, there are signs of upward momentum, with the exchange rate rebounding from the 1.07774 support level following the payroll data release. This bullish outlook is further supported by technical indicators, including the 50-period Exponential Moving Average (EMA) and the Momentum oscillator.
Overview
The EURUSD currency pair is in a state of indecision, oscillating within a sideways market as traders await clarity amid recent economic data and upcoming releases. Disappointing nonfarm payroll figures, coupled with the Federal Reserve's hints at a potential rate cut in September, have set the stage for today's anticipated ISM Non-Manufacturing PMI release. Despite the current sideways trend, there are signs of upward momentum, with the exchange rate rebounding from the 1.07774 support level following the payroll data release. This bullish outlook is further supported by technical indicators, including the 50-period Exponential Moving Average (EMA) and the Momentum oscillator.
Key Economic Events
Monday 14:00 (GMT+0) - USA: ISM Non-Manufacturing PMI (USD)
Tuesday 05:30 am (GMT+0) - Australia: RBA Interest Rate Decision (AUD)
Tuesday 09:00 am (GMT+0) - Europe: Retail Sales m/m (EUR)
Tuesday 22:45 (GMT+0) - New Zealand: Employment Change q/q (NZD)
Wednesday 14:00 (GMT+0) - Canada: Ivey PMI (CAD)
Friday 12:30 (GMT+0) -Canada: Employment Change (CAD)
Technical Analysis
The EURUSD is trapped in a sideways market looking for direction amid disappointing nonfarm payrolls, the Fed's hints for a possible rate cut in their September meeting, and ahead of today's release of ISM Non-Manufacturing PMI . Despite the sideways trend, the exchange rate indicates an upward momentum after bouncing off the 1.07774 support area amid the release of the payrolls on Friday. Both the 50-period Exponential Moving Average (EMA) and the Momentum oscillator support this upward outlook for EURUSD. Prices have moved above the EMA, and the Momentum oscillator values are above the 100 baseline. Additionally, the Relative Strength Index crossed above 50 but still below the overbought zone
Potential Upside Targets
If the bulls manage to maintain control of the market, traders may consider the following three potential upside targets:
1.09480: The first price target is 1.09480, which matches the peak on July 17.
1.10208: The price target for the second objective is 1.10208, reflecting the (R2)resistance calculated using the weekly Pivot Points method.
1.11394: An additional resistance level is set at 1.11394, corresponding to a weekly peak formed on December 12.
Potential Downside Targets
If the bears manage to take control of the market, traders may find potential opportunities in the following four downside targets:
1.08699: The initial level of support is identified at 1.08699, corresponding to an internal trendline and the weekly Pinot Point using the standard method.
1.08166: The second downside target is expected to be 1.08166, which corresponds to the (S1) support estimated using the weekly Pivot Points method.
1.07774: The third line of support is estimated at 1.07774, which aligns with the trough marked on August 1.
1.07614: An additional support level is estimated at 1.07614, representing a peak recorded on June 18.
Fundamentals
In July, the unemployment rate rose to 4.3%, and nonfarm payroll employment increased by 114,000, as reported by the U.S. Bureau of Labor Statistics. Employment saw growth in health care, construction, transportation, and warehousing but declined in the information sector. The household survey indicated an increase in the number of unemployed people and those working part-time for economic reasons. Additionally, the establishment survey reported slower job growth compared to the average monthly gain over the past year. The EURUSD exchange rate saw a daily increase of 1.3%
Conclusion
In conclusion, the current state of the EURUSD currency pair, which is fluctuating in a sideways market due to mixed economic signals. Recent disappointing nonfarm payroll data and hints of a potential Federal Reserve rate cut in September have added to the uncertainty. The pair shows signs of upward momentum, supported by technical indicators like the 50-period Exponential Moving Average (EMA) and the Momentum oscillator. Key economic events, including the upcoming ISM Non-Manufacturing PMI release, are expected to influence future movements. Potential price targets are identified for both bullish and bearish scenarios. The labor market data for July, revealing a rise in the unemployment rate to 4.3% and a modest increase in nonfarm payroll employment, further complicates the outlook.