EUR/USD Volatility Peaks Ahead of Crucial US Economic Releases

The EUR/USD pair is trading cautiously around Monday's low of 1.1500 during the European session on Tuesday, as investors await key US economic releases this week for cues on interest rate outlook. The major currency pair remains volatile due to its sensitivity to US monetary policy decisions.

Investors are closely watching the upcoming US Nonfarm Payrolls (NFP) data for July, which will be released on Friday. This data has significant implications for the Federal Reserve's (Fed) interest rate decisions, as the central bank has suspended delivering forward guidance on rates since its June meeting.

The European Central Bank (ECB) is also in focus, with traders increasingly confident that it will hike interest rates at its September policy meeting. Analysts at Deutsche Bank have estimated a 90% chance of an ECB rate hike in September.