In today's European trading session, EUR/USD strengthened by 0.3%, triggering buying interest just below the 1.08 level on Thursday. Despite this upward movement, the shared currency has exhibited a lackluster performance in recent sessions, with magnitudes of intraday declines significantly exceeding recovery attempts. The pair's inability to garner bullish momentum even with the Federal Reserve's dovish stance raises intriguing questions about the market's sentiment and future direction.

 On Wednesday, the Fed decided to maintain its interest rates within the 5.25%–5.50%range. However, the dovish tone adopted by Fed Chair Jerome Powell has captured traders' attention. Powell indicated that if inflation trends align with expectations, economic growth remains stable, and labor market conditions persist, a rate cut could be a possibility in the September meeting. This dovish guidance has injected a sense of cautious optimism into the market.

 Turning our attention to the Eurozone, the recent preliminary Harmonized Index of Consumer Prices (HICP) for July surprised markets with a hotter-than-expected reading of 2.6%, surpassing the anticipated 2.4%. Core HICP, excluding volatile items like food and energy, also showed steady growth at 2.9%, slightly above the forecasted 2.8%.

 Furthermore, the Eurozone's preliminary GDP growth for Q2 beat expectations, clocking in at 0.3% compared to the forecasted 0.2%. This steady economic expansion, coupled with persistent inflation, complicates the outlook for the European Central Bank (ECB). While some ECB policymakers are aligned with the market's anticipation of two more rate cuts this year, others remain non-committal, highlighting the uncertainty in the ECB’s policy trajectory.

 Based on the technical chart and recent market dynamics, the EUR/USD pair faces a crucial juncture. For the last two weeks, there have been notable intraday selloffs, suggesting a potential continuation of the downward trend towards the ascending support line around the 1.0700 mark. This level, marked as a target on the chart, aligns with significant support and could act as a pivotal point for the pair's recovery. Given the current market sentiment and the absence of a dovish surprise in today's NFP report, the EUR/USD decline may persist in the short term. A sustainable recovery seems unlikely until the pair tests this key support level:

As we await the US NFP data for July, the market remains in a holding pattern. The consensus estimate predicts a slowdown in job additions, estimating 175K new hires compared to the previous 206K. The Unemployment Rate is expected to remain stable at 4.1%, while Average Hourly Earnings—a key indicator of wage growth—are anticipated to show a slight deceleration to 3.7% annually and a steady 0.3% monthly increase.

 Adding to the complexity, the US ISM Manufacturing PMI for July revealed a faster-than-expected contraction at 46.8, against an anticipated 48.8. Initial Jobless Claims also surged to their highest in 11 months at 249K, signaling potential headwinds for the labor market.

 Shifting gears to the GBP/USD pair, the British pound has extended its losses following the BoE decision to cut its policy rate by 25 basis points to 5%. Governor Andrew Bailey emphasized that despite the increase in the minimum wage, inflation risks have moved closer to the 2% target. The pair traded around 1.2700 during the late Asian session on Friday, reflecting market reactions to the BoE’s policy adjustment.

 The GBP/USD pair is currently testing the lower margin of its mid-term ascending channel, as depicted in the technical chart below. A break below this crucial support level could signal the end of the current bullish trend, potentially leading to an accelerated decline. If the price breaches this ascending band, the structural integrity of the upward trajectory will be compromised, inviting further bearish pressure: