The EUR/USD currency pair maintained stability below the 1.1100 resistance level during Thursday’s European session, following a sharp rebound on Wednesday. This recovery came in response to weaker-than-expected U.S. JOLTS Job Openings data for July, which heightened market expectations for an aggressive policy easing cycle by the Federal Reserve.
The decline in job vacancies—falling to 7.67 million in July from a revised 7.91 million in June, and below the anticipated 8.1 million—significantly pressured the U.S. Dollar. Consequently, the U.S. Dollar Index (DXY), which measures the Greenback’s performance against six major currencies, extended its decline to approximately 101.20.
Market participants are now keenly awaiting the U.S. Nonfarm Payrolls (NFP) data for August, due on Friday, for further insights into labor market conditions. Today’s U.S. economic indicators include the ADP Employment Change and the ISM Services Purchasing Managers Index (PMI) for August, scheduled for release at 12:15 GMT and 14:00 GMT, respectively. Forecasts suggest a rise in private sector payrolls to 145,000 from 122,000 in July, while the service sector PMI is expected to show a slight deceleration to 51.1 from 51.4. Stronger data could reduce speculation of significant rate cuts by the Fed, whereas weaker results might bolster such expectations.
In the Eurozone, attention is focused on the Retail Sales data for July, set for release at 09:00 GMT. Analysts predict a 0.1% increase following a 0.3% contraction in June. However, even a modest improvement is unlikely to shift market expectations significantly, with speculation that the European Central Bank (ECB) will proceed with rate cuts this month. ECB officials have expressed concerns over weak growth, with Governing Council member François Villeroy de Galhau recently stating that there are “good reasons” to consider a rate cut in September due to ongoing growth challenges.
The final HCOB PMI report for the Eurozone indicated a slower pace of economic expansion, with the Composite PMI declining to 51.0 from an initial reading of 51.2. This slowdown, driven by reduced service sector growth and ongoing manufacturing sector contraction, adds to concerns about the region’s economic outlook.
On the technical front, EUR/USD is trading around 1.1080 after a recovery from a two-week low of 1.1025. The pair is holding steady near the 20-day Exponential Moving Average (EMA) at 1.1055, with longer-term indicators showing a bullish trend. The 50-day and 200-day EMAs are also trending upward. Despite the RSI falling below 60.00 from overbought levels, the pair’s immediate resistance is seen at the recent high of 1.1200, with support near the psychological level of 1.1000.
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