05.09.202500:28 Forex Analysis & Reviews: The Most Important Day of the Week

The start of every month is marked by just one event— the release of the US labor market and unemployment data. These figures hold less significance in other countries, but it's crucial to recognize that, in one way or another, the entire currency market is influenced by the US dollar. And the US dollar's rate depends on Fed monetary policy and overall US policy. In 2025, both these factors will severely work against the American currency. The worse the outlook for the Fed's policy and Trump's policy, the further the dollar will fall.

In my opinion, many market participants are mistaken in thinking that the worst is already behind us for the dollar. In recent weeks, Donald Trump has been imposing and raising tariffs rather sluggishly, and the idea of the Fed resuming its easing cycle is becoming legendary. Nevertheless, I believe that the decline in the dollar is far from over. And Friday's stats may finally jolt the market out of its stupor.

Before discussing the labor market and unemployment, I should note that virtually all US reports this week were weak. The only exception was the ISM Services PMI, which rose from 50.1 to 52.0 in August. However, demand for the US currency did not increase after this report. On higher timeframes, you can see that the pair's quotes have been trading in the same range for several weeks. Since July 1, when the euro set a 3-year record high (1.1828), the dollar managed to "improve" its position by 200 basis points. In my view, this perfectly illustrates the market's desire to buy the US dollar.

The number of new nonfarm jobs in August may be only 75,000—an extremely low figure, though economists are wary of forecasting too much, remembering the last three months. Thus, it would not be difficult to see a higher number, but even a result of 85,000 wouldn't thrill anyone.

Unemployment may rise to 4.3%. While the market expects this value, it's still unlikely to please dollar buyers. Based on all of the above, I believe the best-case scenario is that demand for the US currency doesn't fall on Friday.

Wave Pattern for EUR/USD:

Based on my analysis of EUR/USD, the instrument continues to build an upward trend segment. The wave pattern still depends entirely on the news background tied to Trump's decisions and US foreign policy. The trend's targets may extend as far as the 1.25 area. Therefore, I continue to consider buys with targets near 1.1875, which matches the 161.8% Fibonacci level and beyond. I assume wave 4 is complete. Thus, now is still a good time for buying.

Wave Pattern for GBP/USD:

The wave pattern for GBP/USD remains unchanged. We are dealing with a bullish, impulsive trend segment. With Trump in charge, the markets may see many shocks and reversals, which could have a strong impact on the wave pattern, but for now, the working scenario remains intact. The upward trend targets are now near 1.4017. Currently, I presume the downward wave 4 is complete; wave 2 in wave 5 may also be complete or nearing completion. Thus, I recommend buying with a target at 1.4017.

Core Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often subject to change.
2. If you're not confident in the market, it's better to stay out.
3. You can never be 100% certain about the direction. Never forget your protective Stop Loss orders.
4. Wave analysis can—and should—be combined with other forms of analysis and trading strategies.