The EUR/USD dithers around the parity while waiting for the publication of the NFP
EUR/USD price ended lower yesterday under pressure from better than expected US economic data. The euro is back to test its recent lows, continuing its seesaw movement around the parity threshold. The US ISM manufacturing index came out unchanged in August, at its lowest level since June 2020, when the consensus expected a further drop, and unemployment benefit claims also surprised by coming out below expectations.
The EUR/USD price is now awaiting the monthly US employment report. While the consensus calls for 300,000 job creations last month, the various estimates range from around 100,000 to 500,000. It is therefore especially in the event of a reading outside this range that the EUR/USD could experience a spike in volatility before ending the week.
However, the EUR/USD’s underlying outlook remains bearish, because although the ECB should significantly accelerate its monetary tightening in the coming months, inflation will probably continue to worsen in the euro zone with the recent devaluation of the euro and the explosion of electricity prices while the peak of inflation has been reached in the United States and this inflation should gradually begin to slow down.
In addition, the slowdown in the global economy is expected to worsen in the coming months with all the different health, real estate and energy crises around the world.
EUR/USD 4 hour chart – key levels
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