EUR/USD Rallies Above $1.17 Ahead of Key Data Week – Will the Momentum Hold?
Key Takeaways
- Euro posts 2.4% monthly gain in August, its seventh positive month out of eight.
- Eurozone inflation, PMI data, and U.S. labor reports could spark major volatility.
- Friday’s U.S. Nonfarm Payrolls (NFP) report will be the week’s biggest market mover.
Euro Steady, Traders Brace for Data Avalanche
The EUR/USD pair edged 0.2% higher on Monday, reaching an intraday high of $1.1725 as traders positioned for a data-packed week. Despite U.S. stock markets being closed for Labor Day, forex trading remains active – and low liquidity conditions could amplify price swings.
The euro enters the week with a 2.4% August rally, underlining strong bullish sentiment even as uncertainties around U.S. inflation and Federal Reserve policy loom.
Key Economic Events Driving EUR/USD
- Tuesday: Eurozone CPI (August) – Forecast at 2.0% YoY. A surprise print could spark immediate euro volatility. U.S. ISM Manufacturing PMI and Prices data follow later in the session.
- Wednesday: JOLTS Job Openings – Fresh insight into U.S. labor demand.
- Thursday: ADP Nonfarm Payrolls, ISM Non-Manufacturing PMI, and Prices Index – Crucial indicators for Fed rate expectations.
- Friday: U.S. Nonfarm Payrolls (NFP) – Consensus sees 78K jobs added vs. 73K in July. Potential revisions to previous months’ figures could further shake markets.
Why It Matters for Euro Bulls and Bears
- Stronger U.S. jobs data → boosts the dollar, weighing on EUR/USD.
- Weaker labor numbers → reinforce euro strength as traders price in faster Fed rate cuts.
- Unemployment is projected to rise slightly to 4.3% from 4.2%, which could tilt sentiment toward dovish policy.
Technical Setup – Watch $1.1750 Resistance
EUR/USD sits near its 50-day moving average, a key technical battleground.
- Bullish breakout: A move above $1.1750 could open the door to $1.1830.
- Bearish scenario: Failure to hold support risks a pullback toward $1.16.
Outlook
With inflation, PMI, and labor data lined up, this week could set the tone for euro-dollar trading into Q4 2025. Expect heightened volatility and potential trend-defining moves.
