The EUR/USD currency pair continued to exhibit very sluggish, uneventful movement on Thursday. Throughout the day, there were no significant reports or events that would cause the market to move even slightly more actively. Thus, the "very important week" has turned out to be quite dull so far. We saw a rise in the dollar on Monday after the US ISM Manufacturing Index exceeded forecasts. In the following days, however, the dollar mostly fell, as the ADP, JOLTs, and ISM services reports came in weaker than market expectations. It cannot be said that the dollar rose significantly on Monday. Nor can it be said that the dollar fell too sharply from Tuesday to Thursday. Traders did not show much interest in any new loud statements from Donald Trump. Therefore, the first four trading days of this "very important week" have surprised absolutely no one, and volatility this week remains low despite the important reports.

Certainly, the most important day of the week is today. Experts have been talking all week about the labor market and unemployment reports, so there is little more to add on this topic. Every trader knows that if the NonFarm Payrolls and unemployment rate come in weak, the dollar will fall not only because the important report figures are weak, but also because the likelihood of further tightening of the Fed's monetary policy for the remainder of the year will drop even further. The market had already reacted very positively to the Federal Reserve rate hike two months ago, and not just one hike.

Moreover, throughout 2026, we discussed that the new Fed Chairman (i.e., Kevin Warsh) would be selected by Donald Trump much more carefully than Jerome Powell was. Powell has burned Trump, so he surely laid the groundwork in case Warsh decided to act independently and dared not to listen to the White House. Therefore, we remain confident that Warsh will tilt the Monetary Committee towards lowering the key interest rate. If this is not possible (as is the case now), he will act against tightening.

Of course, the market may misinterpret Warsh's rhetoric. Moreover, they might start to view Warsh as merely a puppet of Trump. To prevent this from happening, the new Fed Chairman must make bold statements about the harm of high inflation to the economy and the need to reduce it to target levels by any means necessary. However, Warsh implies to the market that if inflation does not return to 2%, it's not a disaster either. After all, he himself has already stated twice that inflation in the US has exceeded the target level for the past 5 years. Thus, at any moment, he could blame Powell, Joe Biden, the Democrats, or even Iran for high inflation—"a situation he can't manage." We believe that Warsh will continue to do everything possible to avoid raising interest rates, and the FOMC (as shown at the recent meeting) is also in no hurry to vote to tighten monetary policy.

The average volatility of the EUR/USD currency pair over the last five trading days as of August 7 is 52 pips, characterized as "medium-low." We expect the pair to move between 1.1469 and 1.1573 on Friday. The upper linear regression channel points downward, indicating the continuation of a downtrend. The CCI indicator has entered overbought territory, signaling a potential downward correction.

Closest Support Levels:

S1 – 1.1505

S2 – 1.1475

S3 – 1.1444

Closest Resistance Levels:

R1 – 1.1536

R2 – 1.1566

R3 – 1.1597

Trading Recommendations:

The EUR/USD pair has begun a new upward trend on the 4-hour timeframe, which may mark the start of a new phase in the global uptrend on higher timeframes. The global fundamental backdrop for the dollar remains negative, but in 2026, geopolitical factors and the Fed's "hawkish" stance provided strong support for the US currency. However, every fairytale eventually comes to an end. When the price is below the moving average, short positions can be considered with targets at 1.1475 and 1.1444. Above the moving average line, long positions are relevant with targets at 1.1573 and 1.1597.

Explanations for Illustrations:

• Linear regression channels help determine the current trend. If both are pointing in the same direction, the trend is strong.
• The moving average line (settings: 20, 0, smoothed) defines the short-term trend and the direction in which trading should currently proceed.
• Murray levels – target levels for movements and corrections.
• Volatility levels (red lines) – the probable price channel in which the pair will move over the next 24 hours, based on current volatility indicators.
• The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.