The Euro remains under pressure, trading near the 1.1600 support level, with upside attempts consistently capped below 1.1650. At the time of writing, EUR/USD trades at 1.1615, hovering just above a one-month low as investors await remarks from Federal Reserve Chair Jerome Powell amid ongoing U.S. political uncertainty.
Key Drivers:
- France’s political instability continues to weigh on the Euro. While President Macron is expected to appoint a new Prime Minister within 48 hours, deep-rooted budget issues and lack of parliamentary majority keep political risks elevated.
- U.S. Fed in focus: With economic data releases delayed due to the ongoing government shutdown, market attention is firmly on Fed communication.
- On Thursday, New York Fed President John Williams supported expectations for further rate cuts this year, citing softening inflation and labor market concerns.
- The Fed’s September meeting minutes also highlighted internal division on the path of rate cuts, with a slim majority favoring two more this year.
- In Europe, the ECB meeting minutes showed diverging views on inflation risks, though policymakers see no urgency to alter policy for now.
- German trade data showed a larger-than-expected surplus in August (€17.2B), driven by falling imports, but weak export numbers and recent industrial output declines continue to reflect underlying economic weakness in the Eurozone.
Currency Performance Snapshot:
The Euro was strongest against the British Pound on Thursday but weakened against the USD, CAD, and AUD. Overall sentiment remains cautious amid global uncertainty.
| Base → | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| EUR | -0.11% | – | +0.09% | -0.02% | -0.15% | -0.29% | +0.01% | -0.24% |
Geopolitical Update:
A fragile ceasefire agreement between Israel and Hamas has helped slightly boost market sentiment, although long-term stability remains uncertain.
Technical Outlook: EUR/USD Bearish Bias Intact
- Support: 1.1600 remains a key support zone, combining horizontal and trendline support from recent lows. A break lower would expose 1.1575 (August 22/27 lows), and potentially 1.1530 (August 5 low).
- Resistance: Immediate resistance lies at 1.1645–1.1650. A break above this area could challenge the descending trendline near 1.1720, with further upside toward 1.1765–1.1775.
- Momentum: The RSI remains below 50, reflecting persistent bearish pressure. Repeated rejections near 1.1650 reinforce the downtrend.
Conclusion:
With the Eurozone facing weak macro data and France’s political concerns lingering, EUR/USD remains vulnerable. Powell’s upcoming speech could dictate short-term direction, especially in the absence of U.S. economic data due to the government shutdown.
