EUR/USD trims gains ahead of German CPI, US Job Openings figures

EUR/USD trades with moderate gains right below the 1.1750 level at the time of writing on Tuesday. The pair bounced up from last week's lows of 1.1660 as the US Dollar (USD) tumbled on concerns of a highly likely US government closure on Wednesday at 04:01 GMT, but the dismal market mood and weak Eurozone economic data are keeping Euro (EUR) bulls in check.

A meeting between US President Donald Trump and bipartisan congressional leaders on Monday ended without progress, as widely expected, and US Vice President JD Vance affirmed that the government is heading for a shutdown. The closure of the government will delay macroeconomic releases from the US Labour and Commerce Departments, including the key Nonfarm Payrolls (NFP) report on Friday, and is highly likely to weigh on economic growth.

Apart from that, Trump further soured market sentiment on Monday by announcing a new salvo on US tariffs. A 10% tariff on imports of softwood and a 25% levy on kitchen cabinets, vanities, and upholstered foreign furniture will be introduced on October 14, and will join the tariffs on trucks and branded pharmaceuticals that come into effect on Wednesday.

In the Eurozone, Retail Sales contracted in Germany for the second consecutive month in August, and the Unemployment increased beyond expectations, although the jobless rate remained steady, at 6.3%. The focus is now on the preliminary Consumer Prices Index (CPI) for September, ahead of a speech by European Central Bank (ECB) President Christine Lagarde. In the US, the highlight of the day will be the JOLTS Job Openings and August's Consumer Confidence data.

Daily digest market movers: Markets muted with potential US shutdown grabbing the focus

• The possibility of a US government shutdown keeps the US Dollar on its back foot, but President Trump's announcement of new trade tariffs has crushed the frail appetite for risk, keeping major FX crosses and the EUR/USD trapped within previous ranges.
• In Europe, macroeconomic data have been far from supportive. German Retail Sales disappointed earlier on Tuesday, contracting by 0.2% in August, following a 0.5% decline in July and against market expectations of a 0.6% rebound.
• At the same time, German Import Price Index dropped 0.5% further in August, more than twice the 0.2% decline forecasted by the market consensus, following July's 0.4% decline. Year-on-year, import prices dropped at a 1.5% pace, accelerating from the 1.4% seen in the previous month.
• Later on the day, the preliminary German Consumer Prices Index is expected to have remained growing at a steady 0.1% rate in September and to accelerate to a 2.3% yearly pace, from 2.2% in August.
• Eurozone figures released on Monday confirmed a mild improvement in the Consumer Confidence to a -14.9 reading in September, from -15.5 in August. Industrial Confidence edged down to -10.3, from -10.2 in August, although less than the -10.9 expected. Services Sentiment, on the other hand, fell to 3.6 in September, from 3.8 in August, beyond the consensus 3.7 reading.
• During the US Session, the focus will be on the JOLTS Job Openings, which are likely to attract particular interest for traders, as the US government shutdown is likely to delay Friday's NFP report. The market is bracing for a slight decline in Job vacancies, to 7.1 million in August, from 7.18 million in July.

Technical Analysis: EUR/USD resistances are at 1.1755 and 1.1790

EUR/USD's technical picture shows a mild upside momentum. The 4-hour Relative Strength Index (RSI) has popped up above the 50 level, and the Moving Average Convergence Divergence (MACD) remains above the signal line, but the trend remains frail amid a cautious market mood.

To the upside, bulls were rejected at Thursday's high, right below 1.1755, on Monday. Beyond here, a reverse broken trendline, now at 1.1790, is likely to pose significant resistance. Bulls need to confirm above those levels to break the immediate bearish structure and shift the focus back to the September 23 and 24 highs, near 1.1820.

Intraday support at the 1.1710 area is holding bears for now, ahead of last week's lows at the 1.1645-1.1655 area. Further down, the September 2 and 3 lows, near 1.1610, and the August 27 low, at 1.1575, would be the next targets.