The EURUSD experienced fluctuations, largely due to French political events and upcoming US labour market data. The recent dovish tone from Powell has seen the USD recover some losses, shifting focus to upcoming US data, particularly the Non-Farm Payroll report on Friday. Currently, there’s an 89% chance of a September rate cut and 55 bps of easing by year-end; strong data may adjust these probabilities.<\/p>\n
The French Prime Minister\u2019s call for a confidence vote exerted pressure on the EUR earlier in the week, with expectations of political instability. The ECB appears neutral on further rate cuts, with current market expectations at 9 bps of easing by year-end and 20 bps by 2026.<\/p>\n
In technical terms, on the daily chart, the EURUSD rejected a trendline around 1.1740 and found support near 1.16. On the 4-hour chart, a bounce from 1.16 was observed, and resistance is possible at 1.1664, while buyers might seek a breakout. On the 1-hour chart, the swing low at 1.1627 serves as support, with potential for price volatility during upcoming US data releases.<\/p>\n
Upcoming catalysts include US Jobless Claims data and Eurozone and US inflation figures.<\/p>\n
As of today, August 28th, 2025, we see the dollar has regained its footing following comments from the Jackson Hole Symposium. The market’s attention is now firmly fixed on next week’s crucial US Non-Farm Payrolls report, especially after today’s jobless claims showed a resilient labor market at 230,000 and last month’s Core PCE inflation remained sticky at 2.9%. These figures are creating real uncertainty around the Federal Reserve’s next move.<\/p>\n
The intense focus on the jobs data has created a binary setup, which is ideal for volatility-based option strategies. With markets pricing an 89% chance of a rate cut in September, a strong jobs number could violently shift those odds and send the dollar higher. We’ve seen implied volatility on one-week EURUSD options rise to over 8% in anticipation, suggesting that a long straddle could be an effective way to trade the expected price swing.<\/p>\n
On the European side, the euro is being weighed down by the upcoming French confidence vote on September 8th. We saw similar euro weakness during the French election cycle back in 2022, reminding us how sensitive the currency is to political instability. Buying short-dated, out-of-the-money EURUSD put options offers a low-cost way to hedge against a negative surprise from Paris.<\/p>\n
There is a clear policy divergence between central banks, with traders expecting 55 basis points of cuts from the Fed this year while pricing just 9 basis points of easing from the ECB. This fundamental difference supports a stronger dollar, particularly if US economic data holds up. If the jobs report is strong, we would consider selling longer-dated EURUSD futures to capitalize on this widening policy gap.<\/p>\n
From a technical standpoint, we are watching the key support around the 1.1600 level. A decisive break below this support, especially after the jobs report, would likely be our trigger to add to bearish positions or buy puts targeting the 1.14 handle. Until that break happens, the price is likely to remain choppy within the current range.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EURUSD reacts to French politics, US labor data; Powell’s tone shifts rate cut expectations and volatility.<\/p>\n","protected":false},"author":62,"featured_media":16965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29776","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=29776"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29776\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16965"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=29776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=29776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=29776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}