In the first two weeks of August, the EUR/USD pair fell to a monthly low of 1.1310. The pair then recovered and reached a high of 1.1733. Today, the pair started by falling and reached an intraday low of 1.1600.

This month, the pair’s main driver will be the decision by the Federal Reserve, which will happen in the final week of the month. The Fed is expected to increase interest rates for the third time this year. This will be an important hike because the Fed will likely provide guidance on the future of interest rates. This guidance will be a key determinant on the future of the dollar.

This week, the focus will turn to the employment numbers. Because of today’s holiday in the US, ADP will not release the jobs numbers on Wednesday. Instead, it will release them on Thursday. The official numbers will be released on Friday.

The EU will also contribute to the direction of the EUR/USD pair. This weekend, Fitch announced that it was likely to cut the credit rating of Italy, the fourth largest economy in the European Union. In recent weeks, the yields on Italian bonds have continued to rise, an indication of the challenges that lie ahead.

The likely scenario is where the pair continues to move lower. As shown below, the shorter-term SMA is about to cross the longer-term SMA in a bearish manner. If it does, the pair will likely test the support of 1.1530 and with further declines, it will test the 1.1300 level. The other scenario is where the pair continues moving higher.

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