Important events today:

14:00 UTC: USD – ISM Services PMI.

The EUR/USD pair continues to rally near the 1.0915 mark during the early Asian session on Monday. The pair’s growth is supported by a weakening dollar following disappointing US employment data. Traders will keep an eye on the ISM Services PMI in the US, which will be released later on Monday.

The slowdown in job growth and the rise in the unemployment rate in the US have heightened concerns about the overall economic slowdown, negatively impacting the US dollar. Non-farm payrolls (NFP) in July increased by 114,000, below the downwardly revised 179,000 in June and below the forecast of 185,000, the Labor Department reported on Friday. Additionally, the unemployment rate rose to 4.3%, the highest since October 2021.

Despite recession fears in the US, Federal Reserve Chairman Jerome Powell noted last week that the central bank’s confidence in a “strong” economy and easing inflation data increase the likelihood that the Fed may soon cut rates. According to the CME FedWatch Tool, financial markets have fully priced in the possibility of a rate cut of at least 25 basis points (bps) at each of the three remaining Fed meetings this year.

Across the ocean, elevated inflation and steady economic growth in the Eurozone have pushed back market expectations of further rate cuts this year. The headline HICP in July rose to 2.6% y/y, exceeding economists’ consensus forecast of 2.4%. The core HICP, excluding volatile items such as food, energy, alcohol, and tobacco, consistently grew by 2.9% against expectations of 2.8%.

Recommendations: Trading mainly with Buy orders from the current price level.