The major currency pair is tracking geopolitical developments and key economic data.
EUR/USD slipped to 1.1554 on Monday.
On the daily chart, EUR/USD still has room to test 1.1565.
The US Dollar Index hovered around 99.6 on Monday after falling sharply in the previous session. Pressure on the dollar increased after a weak US jobs report reduced expectations of a near-term Federal Reserve rate hike.
Nonfarm payrolls unexpectedly fell by 23,000 in July, while data for the previous two months were revised significantly lower. This added to signs of cooling in the labor market and reduced the likelihood of monetary tightening in the near term.
Markets now price in roughly a 44% chance of a 25-basis-point rate hike in September, down from 67% a week earlier. The next key focus will be US inflation data, which should provide fresh clues on the Fed’s policy outlook.
Developments in the Middle East remain another important factor. Iran denies holding direct talks with the US despite Washington’s claims that an agreement is close. Tehran continues to demand an end to the US naval blockade, the lifting of sanctions and compensation for war-related damage before agreeing to any deal.
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