Although the final data on the index of business activity in the manufacturing sector of the euro area showed its decline from 62.8 points to 61.4 points instead of 61.5 points, the market behaved as if nothing had happened. Simply put, the market simply stood still. Perhaps this is due to the fact that the final data did not differ too much from the preliminary estimate. Although, most likely the fact is that the market was waiting for much more significant data, which was published a little later.

Manufacturing PMI (Europe):

Employment in the United States was such a significant data. But the effect was not quite as expected. Employment growth was projected by at least 500,000, which, in anticipation of Friday's publication of a report by the United States Department of Labor, should clearly have greatly encouraged investors. However, employment increased by only 374,000. That, of course, is also quite a lot, but noticeably less than expected. It follows from this that the content of the report may well turn out to be not as optimistic as predicted. So the dollar immediately began to lose ground. At the same time, the final data on the index of business activity in the manufacturing sector intensified the negative effect, as the index fell from 63.4 points to 61.1 points, while the forecast was 61.2 points.

Employment Change (United States):

Today, the single European currency may come under serious pressure due to the expected growth in the producer price index, from 10.2% to 11.0%. Inflation in Europe has already sharply jumped, and the rapid rise in producer prices hints at its further growth. It is clear that this will only increase investor fears about inflationary risks, which cast doubt on the recovery of the euro area economy. Moreover, the European Central Bank flatly refuses to announce plans to tighten monetary policy. Although the rise in inflation leaves no choice but to start raising interest rates. So investors are afraid that the ECB's actions will be sudden, and no one will have time to prepare for them. It is this fear that has a negative impact on the euro.

Producer Price Index (Europe):

The report on applications for unemployment benefits can provide support to the dollar. Thus, the number of initial applications should be reduced by 13,000, and repeated by 47,000. And although the decrease in the number of applications seems to be insignificant, the very fact of further improvement of the situation on the labor market is important. Moreover, the report of the United States Department of Labor will be published tomorrow, and the reduction in the number of applications for unemployment benefits, right on the eve of this event, is an extremely positive factor.

Number of re-claims for unemployment benefits (United States):

The corrective move from the base of 2021 is still relevant in the market, as evidenced by the recent update of the local high. The short-term Fibonacci levels are broken, while the mid term lines are still present in the market. The closest Fibo 38.2 level coincides with the local high from the end of July.

On the trading chart of the daily period, the main movement is the downward trend from the beginning of June. The current correction is considered part of the trend.

Expectations and prospects:

The euro rate is close to the overbought level, which may negatively affect the volume of long positions, in the form of their reduction. In case of a rollback from the local high, the quote may well return to the area of the 1.1800 level, where another stagnation will occur.

If speculators are not stopped by the growing overcooling level of the euro, then a subsequent inertial move towards the Fibonacci 38.2 line is not excluded.

Comprehensive indicator analysis provides a buy signal based on short-term and intraday periods due to the renewal of the high of the current correction.