The euro rallied sharply against the U.S. dollar on Friday after a surprisingly weak U.S. jobs report cast fresh doubts on the strength of the world’s largest economy, raising the prospect of a more aggressive Federal Reserve rate cut later this month.

The U.S. Labor Department reported that nonfarm payrolls (NFP) increased by just 22,000 jobs in August, a fraction of the 75,000 expected and well below July’s revised 79,000 gain. The unemployment rate ticked up to 4.3% from 4.2%, marking the highest level since early 2021. At the same time, average hourly earnings rose 0.3% month-on-month and 3.7% year-on-year, broadly in line with market forecasts.

The disappointing headline print sent shockwaves through financial markets. The euro climbed more than 40 pips, with EUR/USD reaching 1.1740, a gain of nearly 0.70% on the day. Traders rushed to recalibrate expectations for Federal Reserve policy, betting that the central bank will need to respond more decisively to prevent the economy from slipping further into a slowdown.

U.S. Treasury yields tumbled in the aftermath of the report. The benchmark 10-year yield fell to 4.09%, while the 2-year yield dropped to 3.50%, both at their lowest levels since April 7. The steep decline highlighted growing conviction that the Fed will not only cut interest rates at its September 16–17 meeting but could even deliver a larger-than-expected move.

While markets had largely priced in a 25 basis-point (bps) rate cut, the stark weakness in labor market growth has fueled speculation of a more aggressive 50 bps cut. Such a move would mark one of the most forceful policy responses since the pandemic, underscoring policymakers’ concerns about slowing momentum across the economy.

The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major peers, fell sharply below the 98.00 handle, trading near 97.65, down almost 0.65% on the day. The DXY is now testing the lower end of the narrow trading band that has constrained the dollar since early August, leaving it vulnerable to further downside if the Fed signals more dovish intent.

The euro’s rally comes against a backdrop of persistent dollar fragility. The common currency has been supported not by robust Eurozone data—where growth remains tepid—but by the perception that the Fed has less room for maneuver than the European Central Bank (ECB).

For investors, the dynamic reflects a broader reassessment of relative monetary policy trajectories. The ECB, while cautious, has not faced the same degree of urgency to pivot aggressively. By contrast, the Fed is increasingly seen as being on the defensive, forced to offset economic weakness with policy easing even as inflationary pressures remain moderately sticky.

From a technical perspective, EUR/USD has extended its gains in intraday trading, successfully overcoming the downward pressure exerted by the 50-day Exponential Moving Average (EMA50). The pair is currently riding a short-term bullish wave, trading alongside a supportive upward bias line that has provided resilience through recent sessions.

However, momentum indicators suggest the rally may be stretched in the near term. The Relative Strength Index (RSI) has pushed into overbought territory, flashing negative overlapping signals that often precede corrective pullbacks. This suggests that while the broader bias remains tilted to the upside, traders should be cautious of potential profit-taking or consolidation before another leg higher.

Immediate resistance for EUR/USD sits near 1.1765–1.1780, levels that could cap gains in the short run. A sustained break above that zone would open the door toward 1.1850, while initial support is seen around 1.1690–1.1700, followed by stronger footing at 1.1650.

BUY EURUSD

ENTRY PRICE: 1.1730

STOP LOSS: 1.1650

TAKE PROFIT: 1.1850

All eyes are on today's U.S. employment report, with consensus looking for more than 78,000 non-farm jobs, the unemployment rate ticking up to 4.3% and average hourly earnings +0.3 % MoM. The balance of risks is tilted toward a softer print, exposing the greenback to a sell-off.

While a few officials—Chicago Fed President Goolsbee among them—remain on the fence, the wider FOMC dialogue points to a 25 bp cut later this month. A headline print modestly above forecast would probably trim pricing for additional easing but is unlikely to derail the September move.

A robust report, however, would materially reduce over 50% probability the market now assigns to a follow-up reduction in October. Any dollar bounce on strong data is therefore expected to be fleeting, as the Fed is still easing, only more gradually.

Conversely, a sub-consensus release could revive fears that the Fed is already behind the curve. Traders would then price in a non-trivial chance of a 50 bp cut this month (currently zero) and a string of consecutive cuts through year-end—almost certainly triggering a fresh wave of dollar weakness.

Leading labour-market indicators already lean in that direction: the ISM services employment sub-index stayed at 46.5 in August, while the manufacturing gauge rose only marginally to 43.8. ADP private payrolls slowed to 54,000 from a downwardly revised 106,000, and the four-week moving average of initial jobless claims has climbed to 231,000 from 221,000.

Spot gold printed a fresh all-time high above $3,500 earlier this month, lifted by rich equity valuations, a steepening DM sovereign yield curve and elevated U.S. policy uncertainty.

If gold can extend its recent rally beyond the Federal Open Market Committee (FOMC) decision due 18 September, the probability of the metal migrating into our long-term optimistic scenario will be lifted to 40% from 30% for October. The bank left its "floor" for the base-case trading band unchanged at US$3,100 oz and argued that an additional US$300 oz advance over the next 6–12 months is "a high-probability outcome."

Spot gold burst through its prior record high of $3,500 on 1 September and vaulted into a fresh up-leg. The velocity of the move—reminiscent of the two previous breakouts from multi-week consolidations—suggests institutional re-leveraging rather than retail flow. Momentum chasers now have little option but to ride the coattails of the buyside heavyweights.

Thus far, every shallow pullback has been contained well above the $3,500 psychological pivot, underscoring resilient bullish sentiment. Investors looking for re-entry should wait for micro-structural dips toward the $3,515–3,525 zone, where layered bids are expected to re-ignite the next acceleration leg.

On the downside, the first meaningful support confluence sits at $3,452–3,438—the former range top. A further decline at this juncture is expected to encounter robust technical support, thereby preserving the structural bull bias.

Trading Direction: Buy

Entry Price: 3532

Target Price: 3845

Stop Loss: 3497

Valid Until: September 20, 2025, 23:55:00

Support: 3510/3500/3452/3438

Resistance: 3564/3578/3589/3600

In Canada, the latest released Consumer Price Index (CPI) for July dropped to approximately 1.7% YoY, and the core inflation also showed a downward trend. This has significantly reduced the market's expectation of the Bank of Canada(BoC) maintaining a hawkish stance. As a result, it exerts pressure on the Canadian dollar in the medium term and tends to push up the USDCAD exchange rate.

In the United States, the market is closely watching the non-farm payroll data to be released today. The generally-referenced market expectation for non-farm payrolls is around 70,000 to 75,000, and the unemployment rate may slightly rise to about 4.3%. Notably, a series of recent employment-related data in the U.S. have signaled a slowdown in the labor market: the number of initial jobless claims has risen to approximately 237,000, and the employment growth rate in the private sector as measured by the ADP has declined from 106,000 in July to about 54,000. These data all point to a weakening recruitment momentum, leading the market to place a greater "bet" on "whether the Fed will turn dovish more quickly" ahead of the release of the non-farm payroll data.

On the daily chart, after a significant correction in the earlier period, the USDCAD formed a bottom consolidation range between 1.3560 and 1.3750. Recently, it broke through the upper boundary of this range, further expanding the upside potential. Meanwhile, the price retraced downward to 1.3750 twice, but failed to break below this level on both occasions. The candlestick chart shows a pattern of a breakout from the consolidation range followed by a retest for confirmation, which further strengthens the short-term bullish momentum.

Currently, the USDCAD is expected to face resistance at the previous high of 1.3924 in the short term. If it can effectively break through this level, the upside potential for the subsequent market will be unlocked. The first target is expected to reach 1.4160.

Trading Direction: Buy

Entry Price: 1.3780

Target Price: 1.4120

Stop Loss: 1.3720

Valid Until: September 19, 2025, 23:00:00

Support: 1.3770/1.3725

Resistance: 1.3924/1.4160

The latest U.S. economic data has been mixed, reigniting concerns over the strength of the labor market. August ADP private payrolls came in at just 54,000, falling short of the expected 65,000. Meanwhile, initial jobless claims unexpectedly rose to 237,000 last week, the highest level since June. These soft data points have further bolstered expectations for a Fed rate cut. During the day, several Fed officials expressed support for a shift in policy, with Governor Waller notably endorsing a rate reduction at the September meeting.

However, since rate cut expectations were already well anticipated by the market, gold actually pulled back technically after the news broke, demonstrating the classic "Buy the Rumor, Sell the News" reaction. On the policy front, Fed's "Big Three" member John Williams stated that if the economy performs in line with expectations, a gradual series of rate cuts would be appropriate. In contrast, 2026 FOMC voter Michelle Bowman held a dissenting view, arguing that inflation remains high and its trend is concerning, and she explicitly opposes a rate cut in September.

In trade news, President Trump officially signed an executive order on a U.S.-Japan trade agreement, announcing plans to impose a 15% tariff on nearly all Japanese goods. This move could trigger renewed trade tensions. Meanwhile, the Bank of Japan is scheduled to hold a market operations meeting on October 16th. Amid shifting political dynamics, potential adjustments to Japan's currency policy may structurally impact the safe-haven appeal of both gold and the U.S. dollar.

Today's key data focus will be on the U.S. August employment report. Nonfarm payrolls (NFP) are forecasted to rise by 80,000 (consensus: 75,000; previous: 73,000), with average hourly earnings expected to grow 0.3% month-over-month on a seasonally adjusted basis. The unemployment rate is projected to remain at 4.2% (previous: 4.2%). Ahead of the NFP release, the market remains relatively stable, and the U.S. Dollar Index is not expected to see significant fluctuations.

Gold broke above the Bollinger Upper Band but faced selling pressure and pulled back in the 1H chart. It is currently finding support near the Bollinger Middle Band and consolidating. The MACD uptrend histogram is gradually weakening, while the price is failing to make new highs. Additionally, RSI peaks are declining, signaling a potential bearish divergence — suggesting a higher likelihood of short-term adjustment. Support levels are near the Bollinger Lower Band and the previous low, at approximately 3,533 and 3,511, respectively.

Judging from the daily chart, after breaking above the upper boundary of the triangular consolidation pattern, gold has been rising strongly along the Bollinger Upper Band. Currently, the Bollinger Bands are expanding upward, with moving averages diverging upwards as well. In addition, the MACD shows a golden cross, and the RSI stands at 74, entering overbought territory. This indicates that a pullback could occur at any time. Overall, after retesting the upper edge of the triangle, another upward breakout is likely. Initially, investors should sell and then buy at lows later.

Trading direction: Sell

Entry price: 3550

Target price: 3510

Stop loss: 3580

Support: 3510/3480/3400

Resistance: 3580/3600/3700

In July, Australian household consumption saw a significant rise with year-on-year growth reaching 5.1%, the highest in 20 months. This was driven primarily by strong performance in service sectors such as healthcare, hospitality, aviation, and dining. This data has reinforced market expectations that the RBA will keep interest rates unchanged at its September meeting and may influence the pace of future rate cuts. RBA Governor Michele Bullock noted that while the recovery in consumer spending is positive, continued strength could limit the scope for rate reductions. Q2 GDP figures, released at the same time, showed the economy grew by 0.6%, with discretionary spending rising by 1.4% (the fastest pace in three years). Unit labor costs increased by an annualized 4.4%, indicating ongoing inflationary pressures. As a result, market expectations for RBA rate cuts have moderated somewhat. The probability of a rate cut in November is now around 90%, significantly lower than previously priced-in levels. While these figures provided a slight boost to the Australian dollar, the overall impact was limited.

Although ADP employment data has limited correlation with the official nonfarm payrolls report, multiple indicators suggest the labor market is slowing: job vacancies in July fell more than expected, and the number of unemployed individuals surpassed job openings for the first time since April 2021. The market is closely watching the upcoming August nonfarm payrolls report. If, as expected, only 75,000 jobs are added and the unemployment rate rises to 4.3%, it would likely further cement expectations for rate cuts. However, even as labor market weakness emerges, inflationary pressures remain persistent, constraining the Federal Reserve's policy flexibility. The ISM services sector prices paid index remained elevated at 69.2 in August, indicating ongoing inflationary pressures in the service sector. While Fed Chair Jerome Powell acknowledged rising employment risks and hinted at possible rate cuts, he also emphasized that inflation remains the central focus of monetary policy. The federal funds rate currently remains within the 4.25% to 4.50% range. Overall, although signs of softness in the U.S. labor market have boosted expectations for Fed rate cuts, persistently high service-sector inflation is lending short-term support to the U.S. dollar. The August ISM non-manufacturing PMI rose to 52.0, reflecting strong service-sector demand and recovery. However, the employment index continued to contract, and ADP employment growth came in well below expectations, signaling a clear cooling in the labor market. As a result, market expectations for rate cuts have intensified, with a 98% probability now assigned to a cut at the September meeting. Nonetheless, the persistently high services price paid index at 69.2 underscores the stickiness of inflation, limiting the Fed's ability to pivot quickly to an easing stance. This tension between easing expectations and inflation realities is helping to underpin the U.S. dollar's relative strength. Ahead of the Friday nonfarm payrolls release, inflation concerns will likely remain the main factor supporting the U.S. dollar's resilience in the near term.

Based on the daily timeframe, the Bollinger Bands narrowed and converged, while the moving averages flattened. Now, the price is oscillating between the Bollinger Upper and Lower Bands. Besides, the MACD line and the signal line have returned above the zero axis, and the RSI stands at 53 (in neutral territory), suggesting a cautious, wait-and-see stance in the short term. A cross above 0.66 may drive the pair to 0.677, while a breach below 0.643 could drag the pair to 0.59. According to the weekly chart, after getting suppressed by the Bollinger Upper Band, the price broke below the EMA12 but found support at the Bollinger Middle Band, followed by a rebound. If it can hold above both the Bollinger Middle Band and EMA12, further upside toward the EMA200 may be possible. Failure to hold these levels could lead to a decline toward the Bollinger Lower Band, currently near 0.62. Therefore, selling at highs is recommended.

Trading direction: Sell

Entry price: 0.653

Target price: 0.63

Stop loss: 0.67

Support: 0.638/0.635/0.63

Resistance: 0.657/0.66/0.667

Australia’s external sector delivered mixed signals earlier on Thursday. July’s trade figures revealed a notable improvement, with the surplus widening to AUD 7.31 billion compared to AUD 5.37 billion in June, comfortably beating forecasts of AUD 4.92 billion. The improvement came as exports climbed 3.3%, supported by stronger shipments of iron ore, liquefied natural gas, gold, and beef. At the same time, imports slipped 1.3%, weighed down by weaker demand for consumer goods and gold.

In international developments, Bloomberg reported late Thursday that U.S. President Donald Trump signed an executive order to implement his trade agreement with Japan. The deal establishes a maximum tariff of 15% on most imports from Japan, including automobiles and auto parts. Additionally, Japan committed to fast-tracking a 75% increase in U.S. rice purchases, a move seen as strengthening agricultural trade ties between Washington and Tokyo.

Domestically, U.S. economic data continued to offer a mixed picture. The labor market showed further signs of cooling as weekly initial jobless claims ticked higher. At the same time, the trade deficit widened in July while the services sector posted its strongest expansion in six months.

The Commerce Department reported that the U.S. trade balance deficit surged to -$78.3 billion in July, its widest in four months, compared with -$59.1 billion in June and above market forecasts of -$75.7 billion. The data suggested that businesses may have accelerated imports to secure supplies before new tariffs came into effect. The report also revealed that the U.S. trade deficit with China expanded for the first time in several months, while the gap with Mexico widened modestly.

Meanwhile, the ISM Services PMI rose to 52 in August from 50.1 previously, exceeding expectations of 51. The data signaled a firm rebound in service-sector activity. However, the Prices Paid subindex surged to 69.2—the second-highest level since late 2022—highlighting persistent inflationary pressures stemming from tariffs and elevated input costs.

Labor market data also disappointed. The ADP Employment Change for August showed a gain of 54K jobs, below the forecast of 65K, though July’s figure was revised upward from 104K to 106K. ADP’s Chief Economist, Dr. Nela Richardson, commented that while the year began with solid job creation, momentum has been rattled by rising uncertainty. She pointed to labor shortages, cautious consumer behavior, and disruptions related to artificial intelligence as factors slowing hiring.

On the monetary policy front, New York Fed President John Williams reiterated that he expects gradual rate cuts over time, provided the economy evolves in line with forecasts. Meanwhile, Fed Board nominee Stephen Miran stressed the importance of maintaining the central bank’s independence, though he refrained from commenting on whether he would advise President Trump against removing Fed officials.

AUD/USD is currently rebounding near its 100-period and 200-period moving averages on the 4-hour chart, located at 0.6499 and 0.6506 respectively. The convergence of these averages suggests that price is hovering around its local mean, effectively acting as dynamic support. If this level holds firmly, the pair could stage another bullish leg toward 0.6590, where the next resistance level lies. Meanwhile, the RSI sits at 48, still within neutral territory, leaving room for a potential upward move.

On the downside, the next support level is seen near 0.6489. A break below this area could accelerate bearish momentum, with the following support situated at 0.6414. Any unexpected surprises in upcoming data releases could trigger a test of this lower region.

Trading direction: Buy

Entry price: 0.6523

Target price: 0.6590

Stop loss: 0.6460

Validity: Sep 12, 2025 15:00:00