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EUR/USD tries to consolidate above 1.0900

EUR/USD tries to consolidate above 1.0900 | 05 August 2024

05 August 2024, EUR/USD

EUR/USD tries to consolidate above 1.0900

Event to pay attention to today:

17:00 GMT+3. USD - ISM Services PMI

EURUSD:

The EUR/USD continues to demonstrate a robust performance in the early Asian session on Monday, with the pair trading near 1.0915. The growth of the major pair is being driven by the weakening of the dollar in response to disappointing US employment data. Traders will be monitoring the release of the US ISM Services PMI from ISM later on Monday.

The slower pace of job growth and higher unemployment rate in the US have contributed to concerns about a potential slowdown in the overall economy, leading to a negative impact on the US dollar. The US Labor Department reported on Friday that non-farm payrolls (NFP) rose by 114,000 jobs in July, down from a downwardly revised 179,000 in June and below the forecast of 185,000. Furthermore, the unemployment rate increased to 4.3%, representing the highest level since October 2021.

Despite concerns about a potential US recession, Federal Reserve (Fed) Chairman Jerome Powell stated last week that the central bank's confidence in a "robust" economy and the softening of inflation data are increasing the likelihood of a rate cut in the near future. The CME FedWatch Tool indicates that financial markets have fully priced in the possibility of a rate cut of at least 25 basis points at each of the Fed's three remaining meetings this year.

In overseas markets, higher inflation and solid growth in the Eurozone economy have prompted a shift in expectations for further interest rate cuts this year. Headline HICP reached 2.6% y/y in July, exceeding the consensus forecast of 2.4%. Core HICP, which excludes volatile items such as food, energy, alcohol and tobacco, rose by 2.9% against expectations of 2.8%.

Trade recommendation: Trading predominantly Buy orders from the current price level.

Fund your account with cryptocurrency and you will receive up to 10% in balance on your first deposit. The additional funds will be used for trading, increasing trading volumes and helping you withstand drawdowns.

David Johnson
Analyst of «FreshForex» company
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