EUR/USD Pauses Ahead of Crucial US Jobs Data and ECB Rate Hike
The EUR/USD pair is trading sideways, but investors are eagerly awaiting the US Nonfarm Payrolls (NFP) report for August. The European Central Bank (ECB) is widely expected to hike interest rates this month, with ECB Governing Council member Joachim Nagel stating that markets see over a 95% chance of a September rate hike.
The NFP report could trigger an uneven response in rates markets, according to TD Securities. A firm NFP may increase hike fears, but inflation keeps markets nervous and the reaction asymmetric. On the other hand, a modestly softer payroll print would allow the market to lower pricing for a September rate hike.
In terms of technical analysis, the EUR/USD pair is holding above the 20-period exponential moving average (EMA) at 1.1594, suggesting a mildly bullish near-term bias. However, immediate support is located at this same EMA, where a daily close below would weaken the current constructive tone and expose deeper corrective pressure.