(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1835.
• Add a stop-loss at 1.1650.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1650.
• Set a stop-loss at 1.1835.

The EUR/USD exchange rate popped to its highest level since July 28 after Jerome Powell's pivot to interest rate cuts as the US labor market deteriorates. It jumped to 1.1725, much higher than this month's low of 1.1390 as focus now shifts to the upcoming US macroeconomic data Reserve Pivots to Rate Cuts

The EUR/USD pair jumped as Jerome Powell started his pivot towards interest rate cuts, possibly in the upcoming meeting in September citing the situation in the labor market where hiring has stalled and the unemployment rate has ticked upwards.

Powell said this when he addressed policymakers at the Jackson Hole Symposium , an annual event where officials meet to deliberate the state of the economy and possibly hint at what to expect in the next meetings.

The statement came two days after the Federal Reserve published minutes of the last monetary policy meeting, in which officials expressed concerns of inflation as Donald Trump's tariffs took shape.

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Powell's change of tune is because of the recent jobs numbers , which showed that the economy created just 73,000 jobs and the unemployment rate rose to 4.2%. Before the meeting, the previously released jobs data showed that the labor market was doing well.

The EUR/USD exchange rate will react to several important macro data this week. The first key one will be the upcoming consumer confidence report by the Conference Board on Tuesday.

Economists expect the report to show that confidence slowed down slightly in August after the weak jobs report. Precisely, they see the report coming in at 97.8, down from 98 in the previous month.

The other important report will come out on Friday when the US will publish the closely-watched personal consumption expenditure (PCE) report, which shows the price movements in rural and urban areas. The other key numbers to watch this week will be the US GDP report and the flash European inflation data.

EURUSD Chart by TradingViewEUR/USD Technical Analysis

The 12-hour timeframe chart shows that the EUR/USD exchange rate rebounded and moved to the highest level in weeks after Powell's latest speech.

It has remained slightly above the 25-day and 50-day moving averages, and formed the inverse head-and-shoulders pattern, which is a popular bullish reversal sign.

The Relative Strength Index (RSI) and the Stochastic Oscillator indicators have pointed upwards, a sign of renewed momentum. Therefore, it will likely continue rising as bulls target the year-to-date high of 1.1835.

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