The US dollar fell sharply as yields dropped following a weaker-than-expected jobs report. Revisions to the previous month’s data added to market surprise, impacting currency movements.<\/p>\n
For the EURUSD, the 100-day moving average provided support amid the US jobs report reaction. Buyers pushed the pair from near 1.1400 to a session high of 1.1558, with the 100-hour moving average acting as a support level. The level of 1.1558 stalled below the 38.2% retracement, needing a breakthrough for increased upward momentum.<\/p>\n
The USDJPY dropped below the 200-day moving average at 149.51 and the 50% midpoint of the 2025 range at 149.375, creating strong resistance barriers. Price fell to a swing area near 148.56 and 148.73, with a break below bringing the 100-bar moving average on the 4-hour chart at 147.95 into focus.<\/p>\n
Similarly, the USDCHF decreased sharply with the weaker jobs report, falling below the 100-hour moving average at 0.80856. The price extended toward the 50% midpoint at 0.81732 before retreating. It approached a swing area between 0.8054 and 0.80628, with the 200-hour moving average at 0.80159.<\/p>\n
Given the sharp downturn in the US dollar, we should position for continued weakness in the coming weeks. The August 1st jobs report showing a gain of only 95,000 jobs, far below the 180,000 expected, combined with downward revisions, suggests the Federal Reserve may be forced to cut rates sooner than anticipated. The market is now pricing in a higher probability of a rate cut before the end of 2025, a significant shift from just a few weeks ago.<\/p>\n
For EURUSD, the strong defense of the 100-day moving average near 1.1400 is a powerful bullish signal. We should consider buying call options with strike prices above 1.1560, anticipating a breakout in the near term. This view is supported by recent Eurozone PMI data which, unlike in the US, has shown surprising resilience, suggesting a policy divergence that favors the Euro.<\/p>\n
The break below the 200-day moving average in USDJPY is technically very significant, turning major support at 149.51 into new resistance. We see this as an opportunity to purchase put options, as the path of least resistance is now lower. This aligns with the Bank of Japan\u2019s increasingly hawkish tone we saw in July, which contrasts sharply with the now-dovish outlook for the Fed.<\/p>\n
Regarding USDCHF, the failure at the 0.8173 level followed by the break below the 100-hour moving average signals strong selling pressure. We can look to short USDCHF futures or buy puts, using any rally back toward the 0.8085 level as a selling opportunity. The next key downside target for us is the support around the 200-hour moving average near 0.8016.<\/p>\n
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