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Eurozone unemployment edged down to 6.2% in July from 6.3% in June, in line with expectations. The broader EU rate slipped from 6.0% to 5.9%, according to Eurostat.

Eurostat estimated 13.025 million unemployed across the EU in July, including 10.805 million in the Eurozone. Compared with June, jobless figures fell by -165k in the EU and -170k in the Eurozone.

Full Eurozone unemployment rate release here.

ECB President Christine Lagarde issued a stark warning today, saying it would be “very worrying” if U.S. President Donald Trump succeeded in his efforts to exert control over the Fed.

In an interview with Radio Classique, Lagarde stressed "if US monetary policy were no longer independent and instead dependent on the dictates of this or that person, then I believe that the effect on the balance of the American economy could, as a result of the effects this would have around the world, be very worrying, because it is the largest economy in the world."

Lagarde added that Friday’s U.S. appeals court ruling, which declared most of Trump’s tariffs illegal, created a “further layer of uncertainty” for the global economic outlook. The combination of policy unpredictability in Washington and structural risks elsewhere leaves investors wary at a time when global growth is already under strain from weak trade flows and tariff disputes.

Turning to domestic matters, Lagarde addressed mounting political risk in France ahead of the September 8 confidence vote. Opposition parties have pledged to bring down Prime Minister Francois Bayrou’s minority government over unpopular budget squeeze plans for 2026. The political drama has hit French bonds and equities, raising questions about the stability of the Eurozone’s second-largest economy.

Lagarde stressed, however, that France’s banking system is not at the root of the problem. She noted that banks are far better capitalised and structured than during the 2008 financial crisis, and remain responsibly managed. Still, she acknowledged that markets are sensitive to political shocks, and that uncertainty around government stability continues to weigh on risk sentiment.

Daily Pivots: (S1) 198.15; (P) 198.41; (R1) 198.87; More...

Intraday bias in GBP/JPY stays neutral and outlook is unchanged. On the downside, break of 197.84 will extend the pullback from 200.26 towards 195.01 support. But near term outlook will still stay bullish as long as 195.01 support holds. On the upside, firm break of 2002.6 will resume the whole rise from 184.35 to 100% projection of 180.00 to 199.79 from 184.35 at 204.14.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

Daily Pivots: (S1) 171.37; (P) 171.70; (R1) 172.15; More...

EUR/JPY recovered notably today but remains bounded in range of 170.94/172.99. Intraday bias remains neutral at this point. On the upside, break of 172.99 will bring retest of 173.87 high. Firm break there will resume larger rally from 154.77. On the downside, break of 170.94 will bring deeper fall to 169.69 support and possibly below. Overall, price actions from 173.87 are seen as a corrective pattern that could still extend.

In the bigger picture, current rally from 154.77 is still tentatively seen as resuming the larger up trend. Firm break of 175.41 (2024 high) will confirm and target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. However, sustained break of 38.2% retracement of 161.06 to 173.87 at 168.97 will delay this bullish case, and probably extend the correction from 175.41 with another fall.

Daily Pivots: (S1) 0.8635; (P) 0.8655; (R1) 0.8673; More...

Intraday bias in EUR/GBP remains neutral for the moment. On the upside, firm break of 0.8670 resistance will retain near term bullishness and extend the rebound from 0.8595 to retest 0.8752 high. However, sustained trading below 38.2% retracement of 0.8354 to 0.8752 at 0.8600 will indicate near term bearish reversal and target 61.8% retracement at 0.8506.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, further rise could still be seen to 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Nevertheless, sustained trading below 55 W EMA (now at 0.8513) will argue that the pattern has completed and bring retest of 0.8221 low.

Daily Pivots: (S1) 1.7827; (P) 1.7864; (R1) 1.7904; More...

EUR/AUD recovers today but stays well below 1.7979 minor resistance. Intraday bias remains neutral first. On the downside, sustained break of 38.2% retracement of 1.7245 to 1.8155 at 1.7807 should confirm that whole rise from 1.7245 has completed. Corrective pattern from 1.8554 should then be in its third leg. Further decline should be seen to 61.8% retracement at 1.7593. On the upside, break of 1.7979 resistance will retain near term bullishness and bring retest of 1.8155 resistance instead.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. Such pattern could extend further with another falling leg. But even in that case, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Uptrend from 1.4281 is expected to resume at a later stage.

Daily Pivots: (S1) 0.9340; (P) 0.9357; (R1) 0.9373; More....

Intraday bias in EUR/CHF remains neutral and some more consolidations could be seen above 0.9317. Current development suggests that corrective pattern from 0.9218 might have completed with three waves up to 0.9452 already. Further decline is in favor as long as 0.9403 resistance holds. On the downside, below 0.9317 will target 0.9265 support first. Firm break there should resume larger fall to retest 0.9204 low. Nevertheless, break of 0.9403 will dampen this view and bring stronger rise back to 0.9452 resistance instead.

In the bigger picture, the down trend from 0.9204 (2018 high) might still be in progress considering that EUR/CHF is staying well inside the long term falling channel. However, with bullish convergence condition in W MACD, downside potential should be limited in case of another fall. Instead, firm break of 0.9660 resistance will be an important sign of medium term bullish trend reversal.

Markets

Friday’s US July PCE inflation gauges printed bang in line with expectations. Lacking signs of tariff-related inflationary pressures, they basically vindicated Fed chair Powell paving the way for a first rate cut in a year at this month’s meeting. A softer Chicago PMI and a downward revision in the US Michigan consumer survey’s inflation expectation gauges added to the US yield curve steepening. Net daily changes varied between -1.3 bps (2-yr) to +5.2 bps (30-yr). European rates followed the same curve movement, adding up to 3.8 bps at the long end. The first national inflation readings (Germany, France, Spain) suggest little to no surprises to tomorrow’s EMU print expected at 2%. That allows the ECB to stick to the sidelines for some time to come with its 2% deposit rate. The euro tried to capitalize on some dollar weakness that prevailed in the early US trading hours with EUR/USD pushing for the 1.17 barrier. The move lacked strength and conviction, perhaps due to the long weekend ahead in the US (markets closed today for Labour Day), but the pair is giving it another shot this morning (1.1714). A federal appeals court late Friday found that US president Trump had gone too far in his use of emergency powers, mostly under the veil of national security, to install his signature import tariffs. It gave the US administration a mid-October deadline to appeal to the Supreme Court before the ruling takes effect. It’s considered the most consequential ruling so far but comes along with several other judges having concluded that the president is acting without legal support. It’s one of the legal themes to keep an eye at, the other one being Trump vs Cook. Friday’s emergency hearing on the firing of the Fed board governor came with no initial ruling though. Stock markets ended Friday on softer footing. The main European and US indices (especially tech) printed losses up to 1%.

With US investors lacking and an uninspiring economic calendar elsewhere, including the euro area, trading is likely to be technically inspired. That’ll change starting tomorrow though. The US offers an important economic update, kicking off with the manufacturing ISM for August. The JOLTS job report is due Wednesday, the services ISM and ADP job report on Thursday and the official payrolls on Friday. After Powell’s pivot at Jackson Hole, markets are probably especially vulnerable for downside surprises in anything related to the labour market. That would trigger additional dovish repositioning (eg. from two to three rate cuts this year) in US markets, weighing on front-end yields and the dollar. The European focus is mainly directed towards France, where the vote of no confidence is drawing near (September 8). The OAT/swapspread is on our radar.

News & Views

South Korean August trade data showed export growth of 1.3% Y/Y in August, showing no harm so far from the higher reciprocal tariff rate installed by the US in July (15%). Semiconductor exports jumped by 27% with vehicle shipments rising by 9%. It will be interesting to see if export momentum holds going into year-end. The US Commerce Department complicated things on Friday by saying that it will revoke a waiver (in 120 days) for South Korean companies Samsung and SK Hynix to use US technologies in their Chinese operations. These regulations allowed them to import chipmaking equipment without applying for a new license each time (“validated end user”). South Korean imports fell by 4% Y/Y with the trade surplus slightly narrowing from $6.6bn to $6.5bn.

EC president von der Leyen said that the EU’s $150bn SAFE programme reached full subscription. Under the programme, cash will be borrowed against the EU budget to member states to jointly spend on military purchases. Those are mainly EU manufactured products with the EU imposing clauses that limit the amount of third-country components. The EC will now review the bids and optimize the distribution of the funds. Initial disbursements could already begin this year.

GBP/USD started a fresh increase above 1.3500. USD/CAD declined and is now consolidating losses below 1.3800.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

• The British Pound is eyeing more gains above 1.3500.
• There is a key bearish trend line forming with resistance at 1.3530 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD started a fresh decline after it failed to stay above 1.3900.
• There is a connecting bearish trend line with resistance at 1.3755 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair formed a base above the 1.3390 level. The British Pound started a steady increase above 1.3440 against the US Dollar, as discussed in the previous analysis.

The pair gained strength above 1.3465 and the 50-hour simple moving average. It even cleared the 1.3500 handle and tested 1.3530. It is now consolidating gains below 1.3530.

The pair is stable above the 23.6% Fib retracement level of the upward move from the 1.3446 swing low to the 1.3529 high. It seems like the bulls might aim for more gains. The RSI moved above the 50 level on the GBP/USD chart and the pair could soon aim for an upside break above a key bearish trend line at 1.3530.

An upside break above 1.3530 could send the pair toward 1.3545. Any more gains might open the doors for a test of 1.3620. If there is a downside correction, immediate support is near the 1.3500 level and the 50-hour simple moving average.

The first major support could be near the 50% Fib retracement at 1.3485. The next pivot level sits near 1.3445. If there is a break below 1.3445, the pair could extend the decline. In the stated case, it could drop and test 1.3420. Any more losses might call for a move toward 1.3390.

USD/CAD Technical Analysis

On the hourly chart of USD/CAD at FXOpen, the pair climbed toward 1.3900 before the bears appeared. It formed a swing high near 1.3867 and recently declined below 1.3800.

There was also a close below the 50-hour simple moving average and 1.3785. The bulls are now active near 1.3720. If there is an upside correction, the pair could face resistance near 1.3755 and a connecting bearish trend line.

The trend line is near the 23.6% Fib retracement level of the downward move from the 1.3867 swing high to the 1.3718 low. If there is an upside break above the trend line, the pair could rise toward the 1.3785 pivot level.

The next key hurdle on the USD/CAD chart is near the 61.8% Fib retracement at 1.3810. If there is an upside break above 1.3810, the pair could rise toward 1.3865. The next major sell zone is 1.3930, above which it could rise steadily toward the 1.4000 handle.

Immediate support is near the 1.3720 level. The first major support could be 1.3700. A close below the 1.3700 level might trigger a strong decline. In the stated case, USD/CAD might test 1.3600. Any more losses may possibly open the doors for a drop toward 1.3500.

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Daily Pivots: (S1) 1.3720; (P) 1.3750; (R1) 1.3772; More...

USD/CAD is still holding above 1.3720 support and intraday bias stays neutral. On the downside, decisive break of 1.3720 will argue that the corrective pattern from 1.3538 has already completed at 1.3923. Intraday bias will be back on the downside for 1.3574 support first. Break there will bring retest of 1.3538 low. On the upside, though, break of 1.3813 resistance will retail near term bullishness, and bring retest of 1.3923 high instead.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.