EUR/USD

US employment data for August came out so weak that investors are now pricing in three rate cuts by the Federal Reserve by year-end: in September, October, and December, each by 0.25%. While we doubt this scenario will fully play out, the momentum is established, and the EUR/USD could target the price channel line near 1.1880. Only 22,000 new jobs were created in the nonfarm sector versus 75,000 expected, and the unemployment rate rose from 4.2% to 4.3%.

The price rise stalled at the MACD line. To move toward the stated target, consolidation above the MACD line (1.1732) is necessary. The Marlin oscillator is steadily climbing in positive territory and is full of optimism.

However, as long as the price remains within the long-standing range of 1.1632–1.1732, the bullish outlook is still an alternative scenario—though now with significantly increased probability, and risk is once again at the forefront (stock indices are rising).

On the four-hour chart, price has settled above both the balance line and the MACD line, and the Marlin oscillator is unwinding, preparing for a possible breakout higher. We are waiting for the price to consolidate either above 1.1732 or below 1.1670 (the MACD line on H4) to confirm an open target at 1.1632.