Financial markets have entered a phase of paradoxes: positive macroeconomic data is weighing on stock indices. It would seem that the escalation in the Middle East, a fresh oil rally, rising US Treasury yields, and a shocking US jobs report (+162k, which is three times higher than forecasts) should have triggered a powerful dollar rally. However, EUR/USD, after barely flinching at the BLS release, swiftly returned to its starting levels. What is the catch?
In 2026, the US economy is creating an average of 80,000 jobs per month. This is a noticeable improvement compared to the 10,000 jobs created in 2025, although the figure still falls short of the 122,000 seen in 2024. The key takeaway from the August NFP report is that it removes the main excuse for the Fed “doves.” The argument that monetary tightening could “freeze” the labor market is now rapidly losing its strength.
Nevertheless, strong statistics merely remove a barrier; they do not give the green light for a rate hike in September. The market understands this perfectly: the probability of tightening at the upcoming FOMC meeting has barely changed. This is precisely why the calls from FOMC “hawk” Beth Hammack to act quickly have fallen on deaf ears among traders.
Moreover, Hammack has an influential opponent. Donald Trump has publicly urged the Federal Reserve to cut rates “out of patriotism,” stating that a strong economy requires cheap money. Otherwise, the president has threatened to launch trade wars against countries with which the US runs a trade deficit.
Such rhetoric dangerously resembles the experiments of Recep Erdogan, who tried to combat inflation through monetary expansion, ultimately resulting in prices soaring above 80% and a severe currency collapse. The White House seems detached from reality: while Trump demands rate cuts, Scott Bessent predicts Brent crude will fall to $40 once the Middle East conflict ends. One can only guess when this hypothetical end will actually arrive.
The resilience of the euro is driven not only by the wait-and-see approach regarding US inflation data but also by market expectations of “hawkish” signals from the ECB following September’s monetary tightening, which has already been priced in.
Summary: Ahead of key macroeconomic events, EUR/USD consolidation is the most likely scenario, accompanied by a high risk of false breakouts within the 1.157–1.164 range. The optimal tactic is to sell the euro near the upper boundary of the channel and buy near the lower boundary, trading the bounces off support and resistance levels.
