- EUR/USD outlook edges higher near 1.1734 as risk appetite weighs on the US Dollar despite Eurozone services PMI revision.
- Mixed Eurozone data show resilience, while the US labor market concerns deepen amid the delayed Nonfarm Payrolls release.
- Fed’s Logan cools expectations of an October rate cut, leaving markets focused on ISM services data and the ongoing government shutdown.
The EUR/USD outlook improves on Friday, holding above the 1.1730 area after bouncing from Thursday’s lows of 1.1685. The rebound is primarily driven by mild risk appetite that weighs on the safe-haven demand for the dollar, while the euro shrugged off a slight downward revision to the Eurozone services data.
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Eurozone data revealed a mixed scenario but remained broadly resilient. The services sector beat expectations in Spain and Italy but showed some growth in Germany and contracted in France. The Composite PMI for September came in at 51.2, the highest level since May 2024, showing a steady momentum to sustain in Q4 as well. Meanwhile, EU unemployment ticked up to 6.3% in August, but the euro didn’t react much. Hamburg Commercial Bank Economist, Dr. Cyrus de la Rubia, noted, “Things are running a little bit more smoothly in the service sector…with moderately robust growth observed in Germany, Italy, and Spain.”
On the US side, the weakening labor market remains a key concern as Challenger Job Cuts data showed declining layoffs in September, but hiring plans dropped to the lowest level since 2009. The US government shutdown, delaying the release of NFP data, has left traders relying on the Fed commentary. Dallas Fed President Logan dampened the hopes of an October rate cut, saying she was least eager to accelerate rate cuts after September’s move.
The broader risk sentiment remains positive with US equities holding near record high levels while Treasury yields remain steady at 4.1%. However, US political uncertainty and shutdown continue to cloud the outlook. A delayed Senate vote and President Trump’s decision to freeze $26 billion in Democrat-leaning states have further complicated the scenario.
EUR/USD Technical Outlook: Choppy between 100- and 200-MAs
The 4-hour chart for the EUR/USD shows consolidation with a strong support of the 200-period MA. However, the upside remains capped by the 100-period MA, while price remains wobbling around the confluence of 20- and 50-period MAs. The RSI is near the 50.0 area, showing no momentum. The scenario remains mixed so far, looking for fresh impetus.
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The immediate support for the pair emerges at 1.1700 ahead of yesterday’s lows of 1.1685 and then 1.1650. On the upside, the resistance levels emerge at 1.1755 ahead of 1.1800 and then 1.1830.
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