The EUR/USD pair posted modest gains near 1.1615 during the early Asian session on Monday, maintaining its position above the 1.1600 level despite the release of robust US Nonfarm Payrolls (NFP) data for August [1]. According to the US Bureau of Labor Statistics, NFP increased by 162,000 in August, significantly surpassing expectations of 56,000 and marking a notable rise from the upwardly revised 21,000 in July [1]. The US Unemployment Rate remained steady at 4.1% in August [1].
Following the stronger-than-expected jobs report, financial markets increased their bets on a US Federal Reserve rate hike at the September meeting. The CME FedWatch tool indicated that traders are now pricing in nearly 58.3% odds of a 25 basis points rate increase, up from about 50.2% prior to the data release [1]. Joe Brusuelas, chief economist at RSM, commented, 'The American labor market is in good condition heading into the end of the year,' and noted that the data supports the more hawkish members of the Fed who are concerned about inflation [1].
Attention is now shifting to the European Central Bank (ECB) meeting scheduled for Thursday. According to a Reuters poll, the ECB is likely to raise interest rates by a quarter-point to 2.50% at its upcoming policy meeting [1]. Nordea’s strategists highlighted that the key issue for the US Dollar is not only whether the Fed delivers the next move, but also how it frames its policy path beyond September. They emphasized that market reaction will depend on whether the Fed signals the start of a tightening cycle or a one-off adjustment [1].
From a technical perspective, EUR/USD maintains a constructive outlook above the 100-day simple moving average (SMA), with the Relative Strength Index (14) at 55.3 indicating neutral-positive momentum. Initial resistance is seen at the Bollinger upper band around 1.1710, while immediate support lies at the Bollinger middle band near 1.1612 and the 100-day SMA at 1.1565 [1].
CONCLUSION
The Euro has managed to hold above 1.1600 despite strong US jobs data that has increased expectations for a Fed rate hike in September. Market focus now turns to the upcoming ECB meeting, where a rate increase is anticipated. The EUR/USD pair maintains a modestly bullish technical outlook, but further direction will depend on central bank policy signals.