EUR\/USD staged a rebound after sharp post-NFP swings, as the US Dollar failed to hold early gains. The pair dropped to 1.1585 before climbing back to around 1.1620, while the US Dollar Index (DXY) eased to about 99.10 after touching 99.36. Upside is capped by the 200-day Simple Moving Average at 1.1634, with price still oscillating between the 100-day SMA and the 200-day SMA in a tight consolidation.<\/p>\n
The broader trend remains mildly upward, following a move from below 1.1400 in late July to 1.1711 on 21 August, and recent action points to a potential higher low above the 100-day SMA. The RSI has cooled from overbought conditions but holds near 56, above the neutral 50 line, while the MACD sits marginally below zero even as its red histogram bars fade. A break above 1.1634 would bring 1.1700 into view, then 1.1800; support lies at 1.1564, then 1.1508, with 1.1400 below.<\/p>\n
We are seeing high-stakes volatility today on September 4, 2026, after the U.S. labor market added a surprising number of jobs, causing sharp swings in the EUR\/USD. Despite the hot jobs report, the U.S. dollar index is struggling to hold its ground above 99.36, which has pushed the currency pair back up to around 1.1620. This indicates that the market is reluctant to buy more dollars at these levels, giving the euro a chance to establish a solid bottom.<\/p>\n
Currently, the exchange rate is tightly squeezed between the 100-day moving average at 1.1564 and the 200-day moving average at 1.1634. We recommend that derivative traders avoid aggressive directional futures bets until we see a clean daily close outside of this narrow 70-pip range. Historically, when the EUR\/USD compresses between these two key moving averages, it leads to explosive breakout moves within two to three weeks.<\/p>\n
For those utilizing options, we suggest selling short-term iron condors to collect premium while the spot price remains temporarily trapped. Implied volatility usually spikes right after the U.S. employment release and then decays quickly, offering a prime window to profit from falling option prices. However, we must set strict buy-stop orders just above 1.1634 and sell-stop orders below 1.1564 to protect against a sudden breakout.<\/p>\n
The momentum indicators support a cautious bullish outlook as the Relative Strength Index stays comfortable at 56, well above the neutral midpoint. If Eurozone inflation figures later this month remain sticky around the recent 2.2% level, the European Central Bank may delay further rate cuts, supporting the euro. Under this scenario, buying out-of-the-money call options targeting the 1.1700 and 1.1800 levels becomes highly attractive for the coming weeks.<\/p>\n
On the flip side, we must not ignore the downside risks if the U.S. economy continues to show unexpected resilience. A drop below the 100-day moving average of 1.1564 would quickly expose the 50-day average at 1.1508 and potentially the psychological 1.1400 floor. Traders should consider buying protective put options on spot holdings to hedge against any sudden hawkish shift from Federal Reserve officials in their upcoming speeches.<\/p>\n\n\n\n