EUR/USD Maintains Bullish Momentum Following Eurozone PMI Surge

We have been tracking a meaningful leg higher in EUR/USD through the early-August session, with the pair climbing to 1.1554 — its highest print since June 17 — as a batch of stronger-than-expected Eurozone PMI data converged with softer US labour-market signals and a tentative easing of Middle-East tensions around the Strait of Hormuz. The move, roughly a 2 percent recovery from last month's trough, sets the stage for a critical Friday nonfarm-payrolls print that could either extend the rally into the 1.1620 corridor or hand the baton back to dollar bulls.

PMI convergence reinforces the bid beneath EUR/USD

The core catalyst has been a synchronised improvement in activity gauges across both sides of the Atlantic, yet it was the Eurozone surprise that tilted the balance. S&P Global's services PMI surged from 49.4 in June to 51.7 in July — clearing the 51.6 consensus — while the composite index advanced from 50 to 52, signalling a return to expansion territory. The US data were similarly firm: services printed 54.6, composite 54.5, and ISM's gauge at 54.1. Ordinarily, robust US readings would bolster the dollar through yield-differential logic, but the Eurozone's move from contraction into expansion is a more marginal shift in narrative terms, attracting incremental capital flows into euro-denominated assets as traders reprice relative-growth expectations.

ADP miss draws attention to Friday's BLS print

The labour-market leg of the equation is where the dollar's vulnerability lies. ADP's private-sector payrolls tally came in at just 44,000 for July, well below the 68,000 consensus and a sharp deceleration from June's 95,000. With the Bureau of Labor Statistics due to release its official nonfarm-payrolls report on Friday, consensus sits near 57,000 versus 80,000 previously. Any downside miss would reinforce the soft-landing narrative that has underpinned the euro's recovery, while an upside surprise could re-ignite dollar strength through a hawkish-pivot repricing in Fed funds futures. We will want to watch the wage-growth component closely: persistent wage stickiness paired with headline payrolls weakness is a combination that historically keeps EUR/USD in a tight range rather than triggering a decisive break in either direction.

Geopolitical tailwinds and levels to monitor

Supporting the broader risk tone, reports indicate that US-Iran hostilities have paused, with an Oman-brokered framework under discussion for reopening the Strait of Hormuz. Lower crude-oil prices — a consequence of reduced supply-disruption premia — tend to benefit the euro through the current-account channel, since the eurozone is a net energy importer. Against this backdrop, the near-term setup favours a test of 1.1620, with a tactical stop-loss at 1.1480 offering roughly a 1:1 risk-reward profile on a one-to-two-day horizon. Should Friday's payrolls confirm the deceleration trend, we would expect that 1.1620 level to give way, opening scope toward the mid-June highs. Conversely, a strong print above 80,000 would likely see the pair retrace toward 1.1480 in a swift repositioning of yield-differential bets. The macro calendar is the fulcrum; for now, the technical and fundamental picture align in favour of the bulls.