- The EUR/USD pair exhibits a range-bound momentum as markets anticipate the release of September’s Non-Farm Payroll this week.
- ECB officials affirm that interest rates should remain unchanged as inflation and economic growth risks remain balanced.
- FOMC officials’ commentary could lead the traders to reposition.
The EUR/USD outlook indicates that the pair is consolidating near 1.1590, amid mixed data from the US and the Eurozone. In the last week, the euro advanced towards 1.1656, supported by expectations that it remains undervalued and could gain momentum once US data is released.
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Additionally, European Central Bank officials have opined that interest rates should remain unchanged as inflation and economic risks are balanced. This viewpoint capped the euro’s further downside despite the waning broader risk sentiment.
In the US, the greenback received mixed reactions as markets focused primarily on key economic indicators following the end of the US government shutdown. Traders anticipate the September non-farm payrolls, expecting them to provide significant signals regarding the December rate cut.
However, the dollar came under pressure after the likelihood of a December rate cut was reduced. According to the CME FedWatch Tool, markets are now pricing in a 43% probability of a December rate cut, down from last week’s 67%. Meanwhile, the earlier risk aversion lifted the greenback slightly, but the support remained fragile.
EUR/USD Daily Key Events
The significant events in the day include:
- Factory Orders m/m
- NAHB Housing Market Index
- FOMC Member Barr Speaks
- FOMC Member Barkin Speaks
Markets await the speeches from FOMC members Barr and Barkin, as a slight shift in tone could deliver insights into further rate expectations and short-term dollar sentiment.
EUR/USD Technical Outlook: Consolidates Under 1.1600
The EUR/USD 4-hour chart shows a sideways to mildly bearish momentum as it trades near 1.1588 on Tuesday. The pair remains above the key 50-period near 1.1582. At the same time, it holds below the 100-period and 200-period MA, near 1.1609 and 1.1612, respectively. This suggests a weakening bullish bias.
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The RSI stands near the mid-50 level, after failing to reach the overbought region. It indicates a neutral momentum, tilting to the downside. A sustained break above the 1.1620 level could trigger a bullish bias. Until then, the pair will remain range-bound. However, if it drops below 1.1570, the bearish bias will likely continue.
Support Levels
Resistance Levels
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