FX.co ★ EUR/USD

During its opening Asian session on Friday, the EUR/USD pair is moving within a range around 1.1625. Traders are likely to stay away from the market, as the key US employment report for August is due to be released on Friday. Chris Waller, a member of the Federal Open Market Committee of the Federal Reserve (Fed), said on Thursday that he favors keeping interest rates unchanged at the upcoming Fed policy meeting in September, provided there are no surprises in the inflation reports. As a result of Waller's comments, the chance of interest rates being raised at the September monetary policy meeting has gone down. The market now suggests a probability of just 50.2 percent, a decrease from 63.2 percent earlier in the week, as shown by the CME FedWatch tool. Today, all eyes will be on US employment figures for new information on the likely future interest rate policy in the United States. The US economy is expected to add 56,000 jobs in August, and the unemployment rate is expected to stay at 4.1%. Any indications of a stronger US labor market could support the USD/EUR exchange rate. According to Reuters' survey, the European Central Bank (ECB) is most likely to raise interest rates at its September monetary policy meeting for the second and final time, making it the shortest rate-hiking cycle in 15 years. Most economists think that higher energy prices will not lead to widespread inflation. A comment from the strategies team at Scotiabank indicates that rate expectations in the Eurozone have changed considerably over the past few sessions, since "markets are 'extending hawkish pricing beyond the 25 basis points of tightening already priced for September, with nearly one full additional 25 basis point hike now priced for year-end.'" They also note that "yield spreads are providing fresh support" for the Euro, particularly since their narrow "(2Y Germany-US yield spread) FV estimate" is currently at 1.1623. On the daily chart, EUR/USD has been showing a bullish short-term trend. Currently, the price is trading at 1.1630. Prices have been trading above the 100-day simple moving average (SMA), showing strength in the pair. The RSI at 57 suggests positive but only moderate market momentum, indicating corrective price movements within a capped range. On the positive side, the closest resistance is the 100-day SMA at 1.1565, while resistance is encountered at the upper Bollinger band at 1.1712, since any attempt to break that level will see sellers taking control. On the downside, the nearest support is the Bollinger midline at 1.1610, and if price falls below it, it will move toward the lower Bollinger band at 1.1505.