The upcoming week promises to be volatile. Volatility will kick off without delay — as early as the opening minutes of Monday's Asian session, EUR/USD traders will begin pricing in the outcome of the talks between Donald Trump and Ursula von der Leyen. In addition to this geopolitical development, the economic calendar is packed with key fundamental events — including Nonfarm Payrolls, the FOMC meeting, eurozone inflation data, the ISM Manufacturing Index, US GDP, and the Core PCE Index. Arguably, this will be the hottest week of July.

Monday

Monday's economic calendar is virtually empty. The only scheduled releases are the Dallas Fed Manufacturing Business Index and China's industrial profit figures. These are tertiary releases that the market is likely to ignore.

Nevertheless, EUR/USD will remain in a zone of price turbulence as traders respond to the outcome of trade talks between the US President and the President of the European Commission, taking place in Thornbury, Scotland.

As of this writing, the Trump–von der Leyen meeting is still underway, so we can only speculate on its outcome. According to Trump, the chances of a deal are "50/50," while Bloomberg insiders report that the EU is ready to accept even an unfavorable (or rather, more favorable to the US) trade agreement to avoid 30% tariffs. However, Financial Times says the two sides have yet to find common ground — negotiations stretched into late Saturday (July 26) and were reportedly "combative." This has been confirmed by Politico, citing sources who said the proposed compromises are "unacceptable to both Trump and EU countries." Many Brussels officials no longer expect that the meeting in Scotland will prevent the US from raising tariffs on August 1.

If the US and EU manage to strike a deal, the euro could receive strong support, fueled by increased demand for risk assets.

Tuesday

The key macro reports for Tuesday will be released during the US session. First up is the JOLTs job openings report — a lagging indicator that reflects open job positions at the end of the reporting month. While not a major market mover on its own, it can impact EUR/USD if it confirms or contradicts existing trends. The previous two months showed increasing openings, with May hitting 7.77 million. A decline to 7.49 million is expected for June. A sharper drop may weigh on the dollar.

Also on Tuesday, the Conference Board's Consumer Confidence Index will be released. After jumping to 98.4 in May, the index fell to 93.0 in June. Forecasts suggest a rebound to 95.9 in July. Here, the trajectory is what matters most — another unexpected drop would put additional pressure on the dollar.

Wednesday

Wednesday is the most event-packed day of the week.

First, we'll get the ADP employment report, often seen as a preview of the official jobs data. Although it doesn't always correlate closely with Nonfarms, a weak ADP number can still impact EUR/USD, especially if it misses forecasts. The market expects only 82,000 private sector jobs to be added in July — a modest figure. The release will support the dollar only if it exceeds the 100K mark.

Second, we'll see the first estimate of Q2 US GDP. The consensus is for a 2.4% growth rate following a 0.5% contraction in Q1. The Q1 drop was due in large part to a 41% surge in imports ahead of April tariffs, distorting the data. The Q2 report should provide a more accurate picture of the economy. If 2.4% is confirmed, the dollar will benefit from signs of business recovery and economic resilience.

Finally, in the late US session, the Federal Reserve will announce the results of its July meeting. On one hand, it is expected to be a "non-event" meeting — the Fed is likely to leave all monetary parameters unchanged (despite Governor Christopher Waller advocating a July rate cut). On the other hand, the outlook for further policy easing remains uncertain. The possibility of a rate cut in September keeps the market on edge, and the July statement could trigger significant EUR/USD volatility. According to the CME FedWatch Tool, the probability of a September cut stands at 60%, down from near certainty at the start of the month. This shift is due to strong June Nonfarms, rising headline CPI, and flat core CPI. However, the slowdown in both core and headline PPI and tariff-related uncertainties continue to weigh. Depending on how the Fed frames its message, the market could interpret it as either dovish or neutral/hawkish, which will be reflected in EUR/USD price action.

Thursday

During Thursday's Asian session, China will release key macro indicators that could indirectly affect EUR/USD. China's Manufacturing PMI has been trending upward for two months, reaching 49.7 in June. It is expected to hold at this level in July. If it unexpectedly climbs above 50 (expansion territory), demand for risk assets may increase, benefiting the euro. Non-Manufacturing PMI is expected to stay in expansion territory, albeit dipping slightly to 50.3 from 50.5. Here, too, the key is whether the index stays above the 50-point threshold.

During the European session, Germany's inflation data will be published. Analysts expect the headline CPI to slow to 1.9% y/y (from 2.0%), with the harmonized index remaining unchanged at 2.0%.

The US session brings the release of the Fed's preferred inflation gauge — the Core PCE Index. Analysts forecast a rise to 2.8% y/y in June. If the index accelerates faster than expected, it could signal an emerging uptrend, as it rose from 2.6% to 2.7% in May. Such an outcome would support the dollar, strengthening the Fed's case for a "wait-and-see" approach at its September meeting.

Friday

The final day of the week is also loaded with key releases. During the European session, the eurozone CPI flash estimate for July will be released. A mixed picture is expected: headline CPI may slow to 1.9% y/y (from 2.0%), while the core index is expected to remain steady at 2.3%. At the latest European Central Bank meeting, Christine Lagarde cast doubt on a September rate cut. If inflation prints come in stronger than expected, the euro could gain on renewed hawkish sentiment.

During the US session, the June Nonfarm Payrolls report will be released. The unemployment rate is forecast to rise to 4.2%, which was the level for three straight months (March–May) before dipping to 4.1% in June.

As for job gains, the consensus sees a modest increase of 108,000 (vs. 147,000 in May). Dollar bulls will be watching closely to ensure the figure doesn't dip below the psychologically significant 100K mark. However, initial jobless claims — a more real-time indicator — have declined steadily for six weeks, suggesting that Nonfarms could beat the low bar.

Also on Friday, we'll get the June ISM Manufacturing Index — a critical macro gauge that had been falling for four months before rising unexpectedly to 49.0 in June. July is expected to see a further rise to 49.5. If the index surprises to the upside and breaks above 50 (expansion), the dollar will likely get a strong boost.

Conclusion

For most of last week, EUR/USD traded sideways in the 1.1730–1.1780 range, with traders taking profits near the range boundaries. This coming week, the "compressed spring" is likely to release — the only question is in which direction.

If the US and EU reach a trade agreement, US GDP disappoints, and Nonfarms signal labor market cooling, buyers may push EUR/USD into the 1.18+ area and even test the yearly (and nearly 4-year) high at 1.1830. Otherwise, sellers may regain control and pull the pair into the 1.1580–1.1690 zone — corresponding to the middle and upper lines of the Bollinger Bands on the D1 chart.