Euro hangs near YTD low vs USD as focus remains on US macro data and ECB policy update

EUR/USD meets fresh supply following the previous day's post-FOMC bounce from a 17-month low.
A hawkish Fed and geopolitical risks underpin the USD, while France’s debt crisis weighs on the Euro.
Traders now look to important US macro releases and the crucial ECB decision for a fresh impetus.

Haresh Menghani FXStreet

The EUR/USD pair sticks to a mildly negative bias through the first half of the European session on Thursday, currently trading below 1.1150 and close to its lowest level since May 2025. The downside, however, remains cushioned as traders keenly await important US macro releases and the key central bank event.

The Advance US Q3 GDP report, along with the US Personal Consumption Expenditures (PCE) Price Index, will be published later today and will be looked to for more cues about the Federal Reserve's (Fed) future policy path. The crucial data, in turn, will drive the US Dollar (USD) and provide some impetus to the EUR/USD pair. The attention will then shift to the highly anticipated European Central Bank (ECB) decision.

The ECB is widely expected to keep interest rates unchanged, while maintaining a hawkish bias toward a potential 25-basis-point (bps) hike in December. Traders will further scrutinize the accompanying policy statement and ECB President Christine Lagarde's comments, which might infuse some volatility around the shared currency and further produce short-term trading opportunities around the EUR/USD pair.

In the meantime, concerns about France’s deepening debt levels and political gridlock ahead of next year’s election continue to undermine the shared currency. The USD, on the other hand, regains positive traction following the previous day's corrective slide from a two-week high amid hawkish Fed bets and geopolitical uncertainties. This, in turn, keeps the EUR/USD pair depressed and backs the case for further losses.

In a widely expected move, the Fed held interest rates steady at the end of the October policy meeting in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack preferring a quarter-point hike. Adding to this, Fed Chair Kevin Warsh signaled during the post-meeting press conference that the central bank remains vigilant against persistent inflation risks stemming from the Middle East conflict.

This comes on top of concerns about energy-driven price pressures and underpins prospects for further tightening by the Fed. According to the CME Group's FedWatch Tool, traders are pricing in around an 80% chance that the US central bank will raise borrowing costs at its December policy meeting. The hawkish outlook, in turn, favors USD bulls and validates the near-term negative outlook for the EUR/USD pair.

EUR/USD 4-hour chart

Technical Analysis

The EUR/USD pair keeps a bearish near-term tone below the 100-period Exponential Moving Average (EMA) on the 4-hour chart, at 1.1216. Bears, however, might await a break below the 1.1115-1.1110 area before positioning for an extension of the well-established downtrend witnessed over the past two months or so.

On the topside, traders may look to intraday swing high near the 1.1160 for signs of either base-building or continuation of the bearish sequence. Any further recovery, however, might confront resistance near 1.1200, which is followed by the 100-period EMA at 1.1215. Sustained strength above this level would be needed to ease the current downside pressure.

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

Economic Indicator

Core Personal Consumption Expenditures - Price Index (YoY)

The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve’s (Fed) preferred gauge of inflation. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures." Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

Why it matters to traders?

After publishing the GDP report, the US Bureau of Economic Analysis releases the Personal Consumption Expenditures (PCE) Price Index data alongside the monthly changes in Personal Spending and Personal Income. FOMC policymakers use the annual Core PCE Price Index, which excludes volatile food and energy prices, as their primary gauge of inflation. A stronger-than-expected reading could help the USD outperform its rivals as it would hint at a possible hawkish shift in the Fed’s forward guidance and vice versa.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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