EUR/USD retreats from six-week highs as Greenback steadies after US NFP revision

I've been watching this EUR/USD pair like a hawk lately, and Tuesday's action was frustratingly predictable. After hitting that sweet six-week high, the Euro just couldn't hold its ground against the Dollar. Typical market behavior - build up hope for two days straight and then yank the rug out from under traders.

The BLS dropped their bombshell revision showing 911,000 fewer jobs than originally reported through March 2025. A 0.6% downward adjustment! Let's be honest - this isn't just "cooling" in the labor market, it's a damn cold shower. The Fed's been asleep at the wheel while employment deteriorated right under their noses.

Looking at the EUR/USD pair trading around 1.1730, we've given back nearly 0.30% already today. The Dollar Index crawled back to 97.60, though it's still weak overall. I'm not buying this recovery for a second - it's just shorts covering their positions before the next leg down.

Meanwhile, Europe's got its own mess brewing with France's political circus after Prime Minister Bayrou got booted. These political upheavals always seem perfectly timed to disrupt any positive momentum the Euro might gather.

The ECB's Villeroy is speaking later today, but I doubt he'll say anything substantial. These central bankers are masters at talking without actually saying anything meaningful.

What really matters this week is the US inflation data - PPI on Wednesday and CPI Thursday. The Fed's got their September meeting coming up, and they're clearly pivoting from their inflation obsession to panicking about jobs. Too little, too late if you ask me.

The market's fully expecting rate cuts now, but everyone's waiting for the inflation numbers to confirm how deep they'll go. I've seen this movie before - the Fed will probably underwhelm and we'll get more volatility.

For traders watching this pair, be prepared for choppy waters ahead. The political instability in Europe combined with the Fed's apparent policy shift makes for dangerous trading conditions. I'm keeping my powder dry until after those inflation reports drop.