EURUSD rises amid weak US data and monetary policy uncertainty

The EURUSD opening price was 1.15701 earlier today. It rose in the first hours of trading, triggered by an unexpected decline in July’s ISM Non-Manufacturing Purchasing Managers' Index (PMI) in the United States. This has raised trader concerns about the American economy’s health and put additional pressure on the US dollar.

Meanwhile, President Trump’s intention to introduce new tariffs on semiconductors, microchips, and certain pharmaceuticals have heightened global uncertainty, further weighing on the greenback. However, hopes for reduced trade tensions persist, supported by potential progress on a US-China trade agreement and an anticipated meeting of the countries’ leaders before year-end. But the impact of these factors remains limited due to insufficient information.

Against this backdrop, the market is also reacting to the upcoming Federal Reserve (Fed) official replacements. Trump’s decision to remove Adriana Kugler from the Fed’s Governing Council has raised concerns about the US central bank’s independence, increasing the risk of political influence on monetary policy and putting even more pressure on the American dollar.

The euro, by contrast, continues to benefit from investor confidence in the eurozone economy, despite persistent trade-related risks. The recent agreement with the US, which imposes 15% duties on most European exports, has weighed on the region's economic growth but averted a full-scale trade stand-off, reducing uncertainty for local businesses. The euro gets additional support from anticipated German fiscal stimulus and other measures intended to improve the bloc's competitiveness. This may mitigate the negative effect of external shocks.

The EURUSD chart reflects current market uncertainty. Following last Friday’s bullish reversal, the pair has entered a consolidation phase. The Stochastic Oscillator (5,3,3) signals overbought conditions, with %K exceeding 80 and suggesting a risk of correction. Meanwhile, on the daily timeframe, the MACD indicator shows that the bearish momentum is exhausting—its bars are getting shorter, while the MACD line is rising, hinting at the upside potential after the correction. Major signals provide further support for the EURUSD growth.

Consider the following trading strategy:

Buy EURUSD at the current price. Take Profit: 1.17000. Stop Loss: 1.14800.

The strategy is valid from August 6 to August 13, 2025.