28.08.202621:42 Forex Analysis & Reviews: EUR/USD – Smart Money Analysis: Nonfarm Payrolls Support the Bears

The EUR/USD pair continues to decline for the sixth consecutive day. I cannot call this decline strong; it became significant only today, and even then only intraday. How long the U.S. dollar's rise will continue remains unclear, but today the U.S. currency was supported by the annual revision of the Nonfarm Payrolls data. What figure was reported? A negative one. So why is the dollar rising? I can only suggest one explanation: the market had expected a much worse figure than -79,000. In my view, when it comes to the annual Payrolls figure, 79,000 jobs is very low. I would like to remind you that an average monthly figure of 100,000–150,000 is considered normal for the U.S. economy. Therefore, 79,000 is lower than the figure previously revised for the June and May reports. In my view, this is still not a reason for the bears to celebrate, but they did receive some additional support today. Kevin Warsh's speech is next.

The news background, in my view, continues to fully support the bulls. First, any chart clearly shows that the European currency began its rise from relatively low levels compared with its average price over the past year. This means that it still has upward potential. Second, the market no longer expects FOMC monetary policy tightening in September. Third, the market has begun to question whether the Fed under Kevin Warsh can tighten monetary policy at all. Fourth, U.S. economic data have recently been disappointing. Fifth, geopolitical developments no longer support the bears or the dollar. Sixth, the ECB may implement another round of monetary policy tightening this autumn. Seventh, the U.S. Treasury has decided to increase its purchases of long-term bonds, reducing demand for the dollar. Eighth, a new trade war between the United States and Canada, as well as between the United States and China, could begin in the near future. Therefore, I see no reason for a bearish advance.

The latest U.S. labor market data showed weak figures, inflation has slowed, and GDP growth has decelerated. These three factors have raised doubts about FOMC rate hikes not only in September but also in the foreseeable future. This is precisely the factor that supported the bears as recently as June but is now working against them. In my view, the bears' only opportunity now lies in a new escalation in the Middle East. However, Donald Trump is not seeking military escalation. He now wants to put economic pressure on Iran.

The current chart picture points to a continuation of the bullish impulse as highly likely. Bearish imbalance 17 was filled, the reaction to it was weak, and this pattern is now considered invalidated. Bullish imbalance 19 remained unfilled. The new bullish imbalance 20 also failed to provide traders with a buy signal. Another bullish imbalance 21 has formed and could generate a signal in the near future. At present, the bulls' positions and prospects remain much stronger than those of the bears.

The economic background on Friday allowed the bears to launch an attack, although a new bullish advance would have been much more logical. Despite the fact that the annual Nonfarm Payrolls report showed a decrease of only 79,000 jobs (the previous revision resulted in a figure of -911,000), this is still no reason to be optimistic about the U.S. labor market. Therefore, in my view, any dollar appreciation currently has very limited potential. Imbalance 21 has not been invalidated, meaning that a buy signal could still form within it. The European currency certainly has room to withstand further pressure.

The bulls still have numerous reasons to attack in 2026, and the outbreak of war in the Middle East has not reduced their number. Structurally and globally, Trump's policies, which led to a significant decline in the dollar last year, have not changed. At present, I see no significant factors supporting the U.S. currency, despite the FOMC's formally hawkish stance. Geopolitical developments, which supported demand for the U.S. currency for most of the first half of 2026, no longer do so. The conflict in the Middle East remains unresolved, but there have been no new hostilities from either Iran or the United States.

Economic Calendar for the United States and the European Union:

• Germany – Consumer Price Index (12:00 UTC).

On August 31, the economic calendar contains one event, which I do not consider important. The economic background will have little or no impact on market sentiment on Monday.

EUR/USD Forecast and Trading Recommendations:

In my view, the pair remains in the process of forming a bullish trend. The news background shifted sharply in favor of the bears six months ago, but the trend itself cannot be considered canceled or complete. Therefore, the bulls may well continue their advance after two liquidity sweeps of clearly defined lows. At present, bullish traders have an excellent support zone in the form of imbalance 21. A new buy signal could form this week. I consider 1.1797 and 1.1850 to be the upward targets for the European currency.