EUR – The U.S. dollar fell in response to a slightly weaker jobs report

The US dollar fell again on Friday. The closely watched US monthly employment data showed that non-farm payrolls increased by only 22,000 jobs in August, far below the forecast of 75,000. The unemployment rate rose to 4.3%, a near four-year high, confirming weakening labor market conditions. However, average hourly earnings rose 0.3% month-over-month in August, matching July's increase, and 3.7% year-over-year, compared to July's 3.9%. According to the CME FedWatch tool, traders currently see a 10% chance of a 50 basis point rate cut at the Federal Reserve's next meeting in mid-month, with a nearly 90% probability of a 25 basis point cut. Since December, the Fed has maintained its benchmark overnight rate in a range of 4.25% to 4.50%. Job growth has slowed significantly, averaging 29,000 jobs per month over the past three months, compared to 82,000 jobs per month in the same period of 2024. Following the data release, Wall Street stocks fell, the dollar declined against a basket of currencies, and U.S. Treasury yields declined. Gold hit a record high of $3,599.89 due to the dollar's weakening. Although Trump did not directly comment on the jobs report on Friday, he reiterated his long-standing dissatisfaction with Federal Reserve Chairman Powell's insistence on high borrowing costs.

Regarding the euro against the dollar, with the 10-day moving average crossing above the 25-day moving average, the RSI and Stochastics indicators have rebounded, and the exchange rate is testing the recent downtrend line, currently at 1.1720. A preliminary breakout was made last Friday. If the euro can stabilize above this level, it could initiate a new uptrend. Subsequent resistance is expected to be around 1.18 and even 1.1829 on July 1st. A breakout above this level could further consolidate the euro's upward momentum. Extended targets include the 1.20 level and 1.2150. Nearest support is expected to be at the 25-day moving average (MA) at 1.1650 and 1.1570, with the next level at 1.15.

Estimated Range:
Resistance: 1.1720 - 1.1830 - 1.2000* - 1.2150
Support: 1.1650 - 1.1570 - 1.1500

Focus:
Monday
Germany's July Industrial Production, Imports and Exports, and Trade Balance (2:00 PM)
Eurozone September Sentix Investor Confidence Index (4:30 PM)

Thursday
ECB Interest Rate Decision (8:30 PM)

Friday
Germany's August CPI and HICP Final Values ​​(2:00 PM)
France's August HICP Final Value (2:45 PM)

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