The UK labor market is exhibiting signs of deceleration, with slowing wage growth potentially alleviating inflationary pressures for the Bank of England. According to official data released by the Office for National Statistics on September 16, the UK employment sector shows further signs of slowdown: August saw a reduction of 8,000 jobs, marking the seventh consecutive month of decline. Additionally, the overall average weekly earnings growth rate, including bonuses, decreased from 5.0% to 4.8%, while private sector base wage growth slightly declined from 4.8% to 4.7%. Although wage increases remain above the 3% level consistent with the Bank of England's 2% inflation target, the deceleration trend indicates some easing of inflationary pressures. In this context, market consensus anticipates that the Bank of England will maintain current interest rates at the upcoming monetary policy meeting on Thursday. The weakening of labor market momentum and the slowdown in wage growth provide the central bank with additional time to assess the ongoing impact of previous tightening measures on inflation. Despite inflation remaining above target, signs of domestic demand moderation have increased, reducing the urgency for further policy tightening. Investors expect the Bank of England to hold rates steady at least until the end of the first quarter of next year, pending clearer economic data on the medium-term trajectory of the labor market and inflation. Meanwhile, monetary policy on the other side of the Atlantic is diverging. Market consensus predicts that the Federal Reserve will announce a 25 basis point rate cut at its policy meeting concluding early Thursday, as recent U.S. inflation trends and some economic indicators weaken, providing the Fed with room for policy adjustment. If the Federal Reserve cuts interest rates as expected, it may lead to a certain degree of dollar weakness, prompting capital flows toward non-dollar assets. This could even alleviate some of the passive depreciation pressure on the pound and create a more accommodative external environment for subsequent policy adjustments by the Bank of England.

Following signs of a slowdown in the U.S. labor market, market participants anticipate the Federal Reserve will cut interest rates by 25 basis points at the September meeting on Wednesday. According to the CME FedWatch Tool, traders currently assign nearly a 100% probability to a 25 basis point rate reduction at the upcoming Federal Open Market Committee (FOMC) meeting. A minority of analysts even speculate that the Fed may implement a more substantial easing. Federal Reserve Chair Jerome Powell is scheduled to deliver a policy statement and hold a press conference on Wednesday. Market participants will closely monitor the FOMC press conference and the economic projections summary, known as the "dot plot," for insights into the trajectory of U.S. interest rates. Corpay Chief Market Strategist Karl Schamotta noted, "As investors prepare for a dovish tone in Wednesday's voting record, the 'dot plot' economic projections, and the press conference, the dollar is trading broadly with a cautious tone."

In the 1W timeframe, the EURUSD price is oscillating upward along the EMA12, with resistance levels at the upper Bollinger Band and the ascending trendline. The RSI is at 62, indicating strong bullish momentum, and the MACD line and signal line are approaching a golden cross. If a golden cross occurs, the price is likely to break above 1.379, with a strong breakout potentially pushing it toward 1.40. Conversely, a weaker breakout may see a retracement back to around 1.32. In the M15 timeframe, the Bollinger Bands are contracting downward, with the SMAs diverging downward. The RSI is at 42, and the MACD line and signal line are below the zero-axis, reflecting a predominantly bearish market sentiment. Support levels are identified at the EMA200 and key psychological level at 1.362 and 1.36. The trading strategy is initially going short, followed by going long, emphasizing a buy-the-dip approach.

Trading Direction: Buy

Entry Price: 1.3575

Target Price: 1.4

Stop Loss: 1.32

Support: 1.34, 1.337, 1.32

Resistance: 1.37, 1.38, 1.4