EURUSD has been trending lower on its 4-hour time frame, moving inside a descending channel and currently testing the resistance. If this area keeps gains in check, price could head back to the channel support at the 1.0850 minor psychological level.

The 100 SMA is below the 200 SMA, confirming that the path of least resistance is to the downside and that the selloff could resume. However, the gap between the moving averages is narrowing so an upward crossover could take place and start an uptrend.

Stochastic is heading lower so price could follow suit but the oscillator is already near the oversold region, indicating that sellers are getting exhausted. Once the indicator turns higher, buyers could get back in the game and push for EURUSD gains.

There are no major reports out of the US or the euro zone today but the upcoming BOE rate statement could spur volatility. The UK central bank is widely expected to cut interest rates by 25 basis points but might also give more dovish remarks or even leave room for increasing bond purchases. US initial jobless claims and factory orders data are due today.

On Friday, Germany will print its factory orders report while France is scheduled to release its trade balance. The bigger catalyst for market action might be the NFP release, which is expected to show a 180K increase in hiring for July. This would be weaker compared to the 271K increase in June, although revisions to previous reports are expected as well.

Leading jobs indicators seem to be pointing at a slowdown in hiring for the month, as the jobs components of the ISM manufacturing and non-manufacturing reports both indicated declines. However, the ADP non-farm employment change beat expectations with a 179K rise in employment versus the projected 171K figure.

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