(MENAFN- Daily Forex) Bullish view
Buy the EUR/USD pair and set a take-profit at 1.1140. Add a stop-loss at 1.1000. Timeline: 1-2 days.
Bearish view
Sell the EUR/USD pair and set a take-profit at 1.1000. Add a stop-loss at 1.1140.
The EUR/USD
exchange rate retreated after the US published mixed jobs numbers ahead of the upcoming European Central
bank (ECB) decision. It retreated to a low of 1.1065, a few points above last week's high of 1155 interest rate decision
The EUR/USD pair retreated after the latest US nonfarm payrolls data. In a report, the Bureau of Labor Statistics (BLS) said that the economy added 142k jobs in August, the smallest increase since 2020.
The agency also trimmed its previously reported July jobs numbers to 98k, meaning that the labor market was not doing well. Also, the unemployment rate improved slightly to 4.2% while wage growth started growing.
Therefore, the market has penciled in a 0.25% rate cut later this month, down from the 0.50% that market participants were expecting.
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Looking ahead, this will be a busy week for the EUR/USD pair as the US is expected to publish its inflation report on Wednesday. Economists expect the data to show that the Consumer Price Index (CPI) fell from 2.9% in July to 2.6% in August, the lowest level in over two years.
Core inflation is also expected to move from 3.2% to 3.0%, which will be a welcome thing by the Federal Reserve, which is working to engineer a soft landing for the US economy.
The EUR/USD pair will also react to Thursday's European Central Bank decision. Economists expect the bank to deliver the second rate cut after slashing it in July. They also see the bank delivering another cut later this year.
The ECB is cutting rates to support an economy that is slowing. Just last week, Volkswagen reported that it might start shutting down factories in Germany for the first time in decades/USD technical analysis
The EUR/USD exchange rate was trading at 1.1085 on Monday, a few points below the key resistance point at 1.1140, its highest swing in December last year.
It has moved above the Woodie pivot point at 1.1020 and the 25-day Exponential Moving Average (EMA). The pair formed an inverse head and shoulders chart pattern.
It has also formed a cup and handle pattern, a popular bullish sign. Therefore, the pair will likely remain in this range ahead of the US inflation data and ECB interest rate decision on Thursday. The key support and resistance points to watch will be at 1.100 and 1.1140.
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