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Euro flatlines above 1.1500 as traders turn cautious ahead of US JOLTS Job Openings data
- EUR/USD trades flat near 1.1505 in Tuesday’s early European session.
- Hot Eurozone inflation report adds to an already strong case for another ECB rate hike.
- Traders await the US JOLTS Job Openings data on Tuesday ahead of the July employment report.
The EUR/USD pair holds steady around 1.1505 during the early European trading hours on Tuesday. Markets remain cautious ahead of the US JOLTS Job Openings data, which is due on Tuesday. On Friday, the attention will shift to the crucial US July jobs report.
Eurozone inflation ticked up in July, bolstering the case for a rate hike from the European Central Bank (ECB). The headline Eurozone inflation rose to 2.9% YoY in July from 2.8% in June, in line with expectations, Eurostat data showed last week. Meanwhile, the core Eurozone inflation accelerated to 2.5% YoY in July versus 2.4% prior, above the consensus of 2.4%.
Financial markets are betting on more than two ECB rate hikes, with moves fully priced in by October and April, according to Reuters.
The US employment data will be the highlight later on Friday, which could offer some hints about the health of the labour market and US interest rate path. Economists expect Nonfarm Payrolls (NFP) to increase by 83,000 in July, while the Unemployment Rate is projected to rise to 4.3% during the same period. In case of stronger-than-expected outcomes, this could lift the Greenback in the near term.
Markets have priced in nearly a 64.7% chance of a US rate hike in September, down from about 77% before the July Fed meeting, according to the CME FedWatch tool.
Fed decision seen as key driver for EUR/USD direction into September
Strategists at ING emphasise that the path for EUR/USD in the coming weeks hinges largely on the Federal Reserve. They argue that “the bigger and more lasting driver of the EUR/USD trend will be the Fed’s September decision,” which “remains unresolved,” leaving this week’s US data as a crucial catalyst. ING notes that the incoming figures will “have a big say if we end the week pressing 1.1615/20 resistance or trading back below 1.15,” underscoring how sensitive the pair remains to shifts in Fed expectations.
Technical Analysis: EUR/USD remains capped below the key 100-day SMA
In the daily chart, EUR/USD retains a bearish near-term bias as spot remains capped beneath the 100-day Simple Moving Average (SMA). Price holds above the 20-day Bollinger SMA, but proximity to the upper Bollinger band suggests upside attempts are constrained within a tightening volatility envelope. The Relative Strength Index (14) at 58.9 stays below overbought territory, hinting at fading bullish momentum rather than a decisive trend reversal.
On the topside, immediate resistance aligns with the upper Bollinger band near 1.1535, ahead of the more significant 100-day SMA barrier at 1.1570, which continues to define the broader bearish cap on the pair. On the downside, initial support emerges at the current price pivot zone around 1.1510, followed by the mid-Bollinger baseline at 1.1435, while a deeper slide would expose the lower Bollinger band support near 1.1335.
