EUR/USD Price Forecast: Firm US Dollar ahead of manufacturing data

EUR/USD Current price: 1.1520

• The Hamburg Commercial Bank upwardly revised European Manufacturing PMIs.
• ISM will release the US October Manufacturing PMI, still forecast below 50.
• EUR/USD retains its bearish bias, aiming to test a critical long-term support at 1.1470.

The EUR/USD pair approaches the 1.1500 mark on Monday, kicking off November, falling to fresh three-month lows amid persistent US Dollar (USD) demand. The Greenback found fresh footing mid-last week following a hawkish Federal Reserve (Fed) announcement. The central bank trimmed the benchmark interest rate by 25 basis points (bps) as expected, but Chair Jerome Powell said the decision was risk management.

Moreover, Powell said that a December rate cut should not be taken for granted. Following the Fed’s announcement, different officials were on the wires, backing the Chair's words. As a result, speculative interest rolled back bets for a December cut, resulting in a firmer USD.

Meanwhile, the United States (US) government shutdown continues. The lack of US data surely fuels the Fed’s wait-and-see stance on monetary policy while leaving market participants clueless.

On the data front, the Hamburg Commercial Bank (HCOB) released the final versions of the European Manufacturing Purchasing Managers’ Index (PMI). The EU index was confirmed at 50, as previously estimated, while the German Manufacturing PMI also came in line with expectations, printing at 49.6.

S&P Global will release the final estimate of the US Manufacturing PMI in the American session, while ISM will publish its own Manufacturing PMI estimate, forecast at 49.5 in October. Other than that, a couple of Fed officials will be on the wires.

EUR/USD short-term technical outlook

Technical Analysis:

In the 4-hour chart, EUR/USD is currently trading at around 1.1520, little changed on a daily basis, yet with a clear downward bias. A bearish 20 SMA slides south below the longer ones, in line with the dominant bearish momentum, standing at 1.1567. Furthermore, the 100 SMA is also bearish, falling above the shorter one at 1.1616, while the 200 SMA continues to trend lower at 1.1664. The Momentum indicator remains in negative territory, suggesting that sellers still hold the upper hand, even as the latest print shows only a mild improvement. At the same time, the RSI indicator has recovered to 32.76 from earlier oversold extremes yet remains well below the neutral 50 mark, reinforcing a bearish tone and only a limited bounce risk for now. As long as EUR/USD fails to reclaim the 20 SMA at 1.1567, bears are likely to press for further softness, while a sustained break above 1.1567/1.1616 would be needed to temper the bearish case.

In the daily chart, a bearish 20 SMA sits below the 100 SMA and above the rising 200 SMA, hinting at sellers holding the grip in the near term. The 20 SMA stands at 1.1613, while the 100 SMA is directionless around 1.1665. Technical indicators corroborate the bearish bias, as the Momentum indicator remains within negative levels, while the RSI indicator is tracking lower at 35.8. Unless EUR/USD reclaims the 20 SMA at 1.1613, risks remain skewed to additional slides toward the 1.1470 price zone, a long-term static support level.

(This content was partially created with the help of an AI tool)