Welcome back to all the FX geeks. I hope you had an awesome weekend and are excited for NFP week! The first week of every month is significant from a fundamental stand point because the United States releases one of the most awaited economic events: the Non-farm Payroll, and Unemployment rate.

Nevertheless, the trading volume will continue to decline during the US and European holiday season, leading to an increased risk of choppy trading.

Ongoing political tensions between the US & North Korea will continue to be an important focus during the week ahead along with the developments in US health care and tax reform. Read ahead to find out more about the major fundamentals this week. For tips on how to trade the news, make sure to check out FX Leaders News Trading Strategy article.

Top Events On This Week's Docket

US Labor Market Reports

First thing first, investors will be anxiously waiting for the US labor market report which will be released on Friday, August 4th at 12:30 (GMT). The NFP is expected to release at 183K which is below the previous figure of 222K. Before the release of this report, we need to monitor the ADP employment report which is due to release on Wednesday at 12:15 (GMT).

The unemployment rate is expected to fall to 4.3% from 4.4%, which is likely to support the bullish sentiment for the Buck. Significantly stronger employment growth and a spurt in earnings make a September rate hike much more likely.

BOE Monetary Policy Decision

The Bank of England will announce its new interest rates decision on Thursday, August 3rd at 11:00 (GMT). The central bank is expected to leave interest rates unchanged at 0.25%.

Inflation: The Bank of England is also expected to release an inflation report along with a press conference conducted by Mark Carney, the Governor of the BOE.

MPC Official Bank Rate Votes: In addition to interest rates, a lot of attention will be paid to the vote split, especially considering the already existing diverging views of MPC officials. I will share more details about trading this news on Thursday, so keep following for updates.

RBA (Reserve Bank of Australia) Policy

The Reserve Bank of Australia will declare its Cash rates on Tuesday, August 1st at 4:30 (GMT). The central bank is supposed to leave interest rates unchanged at 1.50%. Yet, the statement will be worth watching to see further economy outlook.

Canada Labor Market Reports

The latest Canadian labor market report will be published on Friday, August 4th at 12:30 (GMT) with the US Non-farm payroll. As we know, the BOE rose interest rates in their July meeting, therefore, the BOE will be closely monitoring the upcoming data to determine their next policy actions. Investor's confidence is quite high regarding the upcoming economic figures due to the latest GDP figure. 

EUR/USD – Double Top Pattern

Over the previous week, the EURUSD traded bullish after breaking above last week's trading range, signaling investors' bullish sentiment. So, should we expect more bulls in the pair? Sure, but after a bit of a retracement.

Technically, the pair is bullish but in the overbought region. If we look at the 4-hour & daily time frame, the RSI and Stochastic are holding above 70 and 80 respectively. This signifies that the buying trend may get weaker due to sellers dominating the market.

EUR/USD – 2-Hour Chart – Double Top & Bullish Channel

The huge gap between the moving averages and candlesticks is also signaling a potential reversal in the pair. However, that seems likely only upon the release of the US economic events. The only major market mover this week is the US employment data. As discussed earlier, the analysts expect the average hourly earnings to rise 0.3% and a drop in the unemployment rate from 4.4% to 4.3%.

EUR/USD – Key Trading Levels

Support     Resistance

1.1593          1.1752    

1.1503          1.1842    

1.1344          1.2001

EUR/USD Trading Plan

Before the major releases this week, I'm staying bearish below $1.1765, in order to target $1.1695 with a stop above $1.1780. To brush up on your signal trading skills, feel free to refer to our article on how to trade the EUR/USD signals. Good luck and get ready for the exciting forex trading signals ahead!