|

EUR/USD Forecast: Advances on weak US data, dovish Fed rate cut outlook

  • The pair advances toward 1.1560, supported by a gradual weakening of the US Dollar.
  • ADP, PPI and Retail Sales figures confirm slowing demand and labor-market softness in the United States.
  • Dovish Federal Reserve rhetoric strengthens expectations of interest rate cuts.

EUR/USD moves higher on Tuesday, gaining 0.40% on the day to trade near 1.1570 at the time of writing, supported by persistent buying interest following US data releases. The move higher reflects a macroeconomic backdrop increasingly favorable to the Euro (EUR), as newly released US data reinforces the narrative of a cooling US economy and a forthcoming shift toward monetary easing by the Federal Reserve (Fed).

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.32%-0.44%-0.41%-0.02%0.17%0.15%0.05%
EUR0.32%-0.12%-0.11%0.30%0.48%0.46%0.37%
GBP0.44%0.12%0.02%0.43%0.61%0.59%0.49%
JPY0.41%0.11%-0.02%0.38%0.57%0.53%0.44%
CAD0.02%-0.30%-0.43%-0.38%0.19%0.16%0.06%
AUD-0.17%-0.48%-0.61%-0.57%-0.19%-0.02%-0.13%
NZD-0.15%-0.46%-0.59%-0.53%-0.16%0.02%-0.10%
CHF-0.05%-0.37%-0.49%-0.44%-0.06%0.13%0.10%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

The latest ADP figures showed that private employers shed an average of 13,500 jobs per week over the four weeks ending November 8, signaling a labor market losing momentum. ADP’s chief economist Nela Richardson noted that consumer strength “remains in question heading into the holiday hiring season”, echoing the recent slowdown in hiring dynamics.

Fresh Producer Price Index (PPI) data added to this picture. Headline PPI rose 2.7% YoY, in line with expectations. Core PPI slowed down to 2.6%, revealing some disinflationary developments, though not enough to alter the broader policy outlook. On a monthly basis, headline PPI printed at 0.3%, while core PPI registered 0.1%, a benign reading for most market participants.

Meanwhile, US Retail Sales disappointed with a 0.2% monthly increase in September, well below expectations of 0.4%. The slowdown comes after a strong August but reinforces the view of a more cautious consumer, adding to the expectation of softer growth in the fourth quarter.

These data points were accompanied by strongly accommodative comments from Fed Governor Stephen Miran, who stated that “the economy calls for large interest rate cuts” and argued that rising unemployment is the result of monetary policy being “too tight.” Miran also said he hopes the weakness in job figures will “convince” other policymakers to support a rate cut in December. His tone adds weight to already elevated expectations of at least a 25-basis-point reduction at the December meeting.

Against this backdrop, the Euro (EUR) remains supported by expectations of stable monetary policy in the Eurozone and by a global environment increasingly tilting future rate differentials in favor of the EUR.

Market attention will continue to focus on upcoming remarks from European Central Bank (ECB) policymakers, although the US macroeconomic cycle remains the key driver for the pair.

EUR/USD therefore remains firmly biased to the upside as long as investors anticipate faster monetary easing in the United States (US) than in the Eurozone, potentially opening the door to further gains should US data continue to soften.

Chart Analysis EUR/USD

EUR/USD Technical Analysis

In the 4-hour chart, EUR/USD trades at 1.1558. The 100-period Simple Moving Average (SMA) edges lower near 1.1554, keeping broader pressure in place, while price has reclaimed the SMA and attempts to stabilize above it. A sustained hold over the average would firm the near-term tone. The Relative Strength Index (RSI) rises to 58, indicating improving upside momentum after a sharp rebound from sub-30 readings.

The descending trend line from 1.1817 caps the upside, with resistance at 1.1622, followed by 1.1820. On the downside, the break of the earlier descending line from 1.1654 at 1.1533 establishes initial support, ahead of 1.1500. A 4-hour close above the trend-line barrier would extend the recovery toward the next resistance, while loss of the newly formed floor would bring the next support into view.

(The technical analysis of this story was written with the help of an AI tool)

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

More from Ghiles Guezout
Share:

Editor's Picks

AUD/USD bounces back toward 0.6950 on fresh USD supply

AUD/USD bounces back toward 0.6950 in the Asian session on Friday. The US Dollar retreats from 17-month highs as traders take profits off the table ahead of the all-important US Nonfarm Payrolls report. Meanwhile, the Australian Dollar draws support from reviving expectations of a November interest rate hike amid elevated global yields and inflation risks.


USD/JPY struggles near 158.00 as USD retreats ahead of NFP

USD/JPY is struggling for fresh impetus near 158.00, moving away from the top end of its weekly range in the Asian session on Friday, after hotter-than-expected Tokyo CPI and amid a broad US Dollar retreat. Traders reposition themselves ahead of US Nonfarm Payrolls.

Gold remains capped below $4,200 as traders await US NFP for Fed rate cuts

Gold extends its sideways move on Friday, trading below the $4,200 mark heading into the European session as traders await the release of US employment details. The US Nonfarm Payrolls report is expected to show that the economy added only 90K jobs in September, down from the previous month's reading of 162K.

Pi Network retreats to key support level as selling pressure resurfaces

Pi Network price remains volatile in the near term, hovering around $0.0900 at press time on Friday after losing over 3% the previous day. The pullback warns of a steeper correction, with a risk of breaking below a rising wedge pattern on the four-hour chart. Pi Network struggles to maintain a steady recovery as the price remains capped below the $0.1000 psychological barrier.

US Nonfarm Payrolls expected to soften in September

The United States Bureau of Labor Statistics is set to release September Nonfarm Payrolls (NFP) data on Friday at 12:30 GMT. Investors expect NFP to rise by 90K in September following August’s impressive 162K increase. The Unemployment Rate is seen holding steady at 4.1%, while the monthly wage inflation, as measured by the change in Average Hourly Earnings, is projected to hold steady at 0.3%.

Markets are pricing a Fed pause. The jobs data says the hike is still coming
The market has rapidly changed its mind about the Federal Reserve (Fed). Only a week ago, investors saw an October interest-rate hike as the most likely outcome. However, softer inflation and cautious comments from policymakers have since turned a pause into the dominant scenario. Yet beneath that dramatic repricing, the US economy is sending a considerably less dovish message.