The following is paraphrased from Barclays:
EURUSD will continue range-trading this week as markets look to the August US NFP report for direction. Last week’s Fed Chair Yellen speech at Jackson Hole was slightly more hawkish than markets had been expected, strengthening the case for a near-term rate hike.
We look for nonfarm payrolls to rise 200k. We expect 190k of these gains to come from the private sector, and specifically service-providing employers. However, we see a risk that residual seasonality in August employment could weigh on overall employment.
A positive NFP report will likely further solidify those expectations, adding impetus for potential modest near-term EURUSD downside, in our view, towards our Q3 forecast of 1.07.
The data calendar is very light. Other data releases include the ISM manufacturing index (Thursday), which we expect to have softened to 51.5 in August, the Conference Board’s consumer confidence index (Tuesday), Chicago PMI (Wednesday), and productivity and ULC data (Thursday).
We expect euro area "flash" HICP inflation (Wednesday) to print unchanged from July at 0.2% y/y in August (consensus: 0.3% y/y), and we forecast EA core prices to remain at 0.9% y/y.