- The EUR/USD outlook shows limited upside amid the declining risk momentum and renewed dollar demand.
- ECB VP Luis de Guindos remains satisfied with current interest rates and signals no urgency for near-term changes.
- Traders await the US preliminary UoM reports and commentary from President Nagel and FOMC Jefferson for further policy cues.
The EUR/USD outlook shows consolidation, trading around 1.1550, after pulling back slightly from Thursday’s high amid waning risk appetite and mixed Eurozone data. This shift weighs on the euro sentiment, while the revived greenback’s safe-haven lifts the dollar.
Markets remained cautious after a fresh sell-off in global equities, prompted by weakness in AI-linked technology shares. This move sparked fears of an overvalued sector and turned investors’ interest towards the dollar.
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Meanwhile, the prolonged Federal government shutdown has halted key economic data, which includes today’s Nonfarm Payrolls report as well. The investors now focus on secondary data sources for near-term cues.
Additionally, the US Challenger Job Cuts report revealed up to 153,000 job cuts in October, the largest decline in the past two decades. The data reignited hopes for a December Fed cut. However, the Fed officials gave mixed signals, such as Chicago Fed’s Goolsbee reducing expectations for aggressive easing.
In Europe, the German trade data revealed a narrower surplus, while the Eurozone retail sales witnessed an unexpected contraction, weighing on the sentiment and offsetting earlier optimism from upbeat services activity.
Additionally, ECB Vice President Luis de Guindos expressed his satisfaction with the current interest rates and his optimism about services inflation and growth, signaling no urgency for near-term changes.
EUR/USD Daily Key Events
The significant events in the day include:
- German Buba President Nagel Speaks
- FOMC Member Jefferson Speaks
- US Prelim UoM Consumer Sentiment
- US Prelim UoM Inflation Expectations
On Friday, traders look forward to the preliminary UoM consumer sentiment and inflation expectations report, along with commentary from President Nagel and FOMC member Jefferson, for further direction into the policy.
EUR/USD Technical Outlook: Remains Range-Bound Amid Limited Momentum
The EUR/USD 4-hour chart suggests a mild recovery as the pair trades near 1.1550. The price remains below the key 50-, 100-, and 200-period MAs, signaling a continued bearish momentum despite the recent consolidation.
The RSI is above 50.0, indicating the pair is likely to enter a range-bound phase before its next move. A failure to hold above the 1.1530 level could expose the 1.1500 level. Conversely, a breach above 1.1595 could extend gains towards 1.1630. However, a sustained upside seems uncertain without broader euro strength.
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Support Levels
Resistance Levels
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