US JOLTS Job Openings set to show a steady labor market

The US Bureau of Labor Statistics unveils July's employment data, including the Job Openings and Labor Turnover Survey (JOLTS), on Tuesday at 14:00 GMT. This report, which gauges labor demand, is closely followed by market participants as it precedes other significant employment indicators, culminating in the Nonfarm Payrolls (NFP) report on Friday.

The data, which reflect July's labor market, indicates a potential 23,000 job loss in July, suggesting a weak labor market. A weak labor market typically prompts central banks to lower interest rates to stimulate economic growth. However, at the moment, inflation remains a more pressing concern than the labor situation, with tensions escalating in the Middle East leading to a sharp rise in oil prices.

The JOLTS report is forecasted to show 7.3 million job openings in July, slightly below June's 7.359 million, which is still above the 2025 average of 7.08 million. Consequently, market reactions to this headline figure are unlikely. A reading closer to 7.08 million could negatively impact the US Dollar (USD), while a reading above 7.6 million, which was seen in April, could strengthen the USD.

Fed Chairman Kevin Warsh stated in a recent speech that labor conditions reflect full employment, implying that the labor market is not a problem, leaving room for price pressures. His remarks have fueled speculation of an interest rate increase at the central bank's meeting later in the month, making the JOLTS Job Openings report unlikely to change this sentiment.

The EUR/USD pair is currently trading below 1.1600, having breached the weekly open in mid-August amid renewed Middle East tensions. Analyst Valeria Bednarik notes that the pair is battling around a mildly bullish 20-day Simple Moving Average (SMA) while bouncing off a flat 100-day SMA. Technical indicators have recently eased after nearing their midlines, suggesting a modest recovery in buying interest.

The 100-day SMA at around 1.1570 provides immediate support, with a potential bounce back above the 1.1520 level. If this support is breached, EUR/USD could extend its decline towards the 1.1460 area. Resistance lies at 1.1650, followed by the August high around 1.1710. Given the current risk-averse environment, any further gains in EUR/USD seem unlikely until investors bet on a September Fed rate hike.