Important events today:

03.08 14:00 UTC: USD – ISM Manufacturing Index.

The euro retains support following the July ECB decision to keep key interest rates unchanged. Maintaining the previous parameters provided no market grounds to expect immediate policy easing, allowing the single currency to hold onto part of its demand. At the same time, the Fed rate remains higher, and Europe’s own momentum is currently insufficient to drive sustained independent growth.

The main driver of the current session is the weakening dollar following confirmed joint yen purchases by US and Japanese authorities. The pressure on the American currency extended beyond the USD-JPY market: the dollar index remains lower following a noticeable weekly decline, while 10-year US Treasury bond yields decreased. This combination supports EUR-USD, despite the remaining interest rate differential in favor of the US.

Today, the market awaits US manufacturing activity data, which could adjust expectations regarding future Fed actions. A strong report could restore some demand for the dollar; however, prior to its publication, the momentum of American currency weakness prevails. If the current fundamental background holds, the base scenario allows for further EUR-USD strengthening.

Recommendations: BUY 1.1530, SL 1.1495, TP 1.1605.