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EUR/USD Choppy Trading Continues - Volatility Lacks Amid Labor Day! 


The EUR/USD Currency Pair Failed To Stop Its Early-Day Bearish Moves & Remain Depressed Around 1.1830 Marks Amid Downbeat German Industrial Data & U.S. Dollar Strength - Eyes On European Central Bank (ECB) Monetary Policy Decision. During Monday's Asian trading hours, the EUR/USD currency pair failed to take any positive traction and extended its overnight range play below the mid-1.1800 level. However, the bearish sentiment around the currency pair could be associated with the fresh released downbeat German industrial figures, suggesting that the manufacturing sector's recovery probably lost steam. This, in turn, undermined the shared currency and contributed to the currency pair losses.

On the other hand, the broad-based U.S. dollar strength, backed by the upbeat U.S. labor market report and wage growth data, also keeps the currency pair under pressure. Across the ocean, the ECB's concerns over the exchange rate level also undermine the shared currency. Whereas, the on-going coronavirus cases in Spain, France, and German also add further pessimism around the single currency, which tends to currency pair weaker. At the moment, the EUR/USD currency pair is currently trading at 1.1831 and consolidating in the range between the 1.1825 - 1.1848. Moving on, the market traders seem reluctant to place any strong position ahead of the European Central Bank (ECB) monetary policy decision.

At the data front, Industrial Production in Germany climbed less-than-expected in July, as per the official data released on the day, which suggests that the manufacturing sector's recovery probably lost its momentum. Annually, the German industrial production came in at -10.4% in July against +12.1% expected and -11.4% booked in June. However, the shared currency gave a little reaction to the downbeat German industrial figures.

Moreover, the currency pair losses were also bolstered by the ECB's concerns over the exchange rate level. The ECB is considering undermining the shared currency, which has recovered 6% this quarter alone.

Also weighing on the currency pair could be the fresh reports suggests a sharp rise in the coronavirus cases in Spain, France, and German. It is very downhearted headlines that the second wave of the virus is picking up Europe's pace again amid the summer holidays.

Apart from this, the risk sentiment has been flashing red since the Asian session started, witnessed by the S&P 500 Futures' negative performance. However, the reason for the downbeat trading sentiment could be associated with the worrisome headlines concerning Brexit and on-going tension between the U.S. and China.

As a result, the broad-based U.S. dollar remains on the bullish track and still reports gains. However, the U.S. dollar gains were also supported by the upbeat U.S. labor market report, which showed a dip in the unemployment rate and a rise in U.S. Treasury yields. The modest gains in the U.S. dollar kept the currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.18% to 92.882 by 12:05 AM ET (5:05 AM GMT).

Last week, the headline Non-farm payrolls data for August missed expectations with +1371K. Whereas the unemployment rate dropped to 8.4% against. 9.8% expected. In the meantime, the Average Hourly Earnings exceeded expectations, with +0.4% MoM in August vs. 0% expected. Looking forward, the Labor Day Holiday in the U.S. will likely restrict the market moves. Thus, the key event this week is likely to be the European Central Bank (ECB) monetary policy decision. As well as, the updates on the virus and Sino-American tension could not lose its importance. In the meantime, the market players will be interested in the headlines concerning the Brexit.

Daily Support and Resistance

S1 1.1659, S2 1.1743, S3 1.1791

Pivot Point 1.1828

R1 1.1875, R2 1.1913, R3 1.1998

The EUR/USD bounced off over the support mark of 1.1795, and presently it's heading further higher unto the subsequent mark of 1.1890. The pair may gain a critical resistance at 1.1860 level. Conversely, the EUR/USD may encounter support at 1.1808 and 1.1780 mark. We can expect choppy trading today amid U.S. bank holidays in the wake of labor day. Neutral bias controls in the market today. Good luck!

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