EUR/USD trimmed earlier gains on Wednesday, retreating to 1.1750 after touching daily highs near 1.1780, as Eurozone inflation data came in line with market expectations. Despite the US Dollar remaining under pressure due to the ongoing government shutdown, the Euro struggled to maintain momentum.
Eurozone Inflation Meets Expectations
The Eurostat flash estimate showed the Eurozone Harmonized Index of Consumer Prices (HICP) rose to 2.2% YoY in September, up from 2.0% in August, aligning with forecasts. However, core inflation—a more stable gauge—held steady at 2.3% YoY, providing no fresh catalyst for further Euro gains.
- Monthly HICP eased to 0.1% from 0.3% in August.
- Core monthly inflation also held steady at 0.1%.
These figures suggest that while headline inflation has picked up, the underlying trend remains stable, offering little reason for the European Central Bank (ECB) to shift its current monetary stance.
US Dollar Remains Weak Amid Government Shutdown
In the US, a failed Senate vote on a Republican funding bill triggered a partial government shutdown. While the immediate economic impact may be limited, concerns are growing over potential delays in key data releases—especially the Nonfarm Payrolls report due Friday.
- The JOLTS report showed job openings rose to 7.22 million in August (vs. 7.2M forecast), but the hiring rate declined to 3.2%.
- ADP Employment data due later today is expected to show just 50K new jobs added in September—well below 2024’s monthly average.
Market sentiment remains cautious, and the US Dollar Index (DXY) is on the defensive, supporting EUR/USD in the broader context despite today’s pullback.
EUR Performance Snapshot
According to intraday FX performance, the Euro was strongest against the Canadian Dollar and weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.18% | -0.50% | 0.02% | -0.03% | -0.37% | -0.07% | |
| EUR | 0.09% | -0.07% | -0.41% | 0.11% | 0.09% | -0.25% | 0.02% |
Technical Outlook: Key Resistance Levels Cap EUR/USD Rally
EUR/USD remains under moderate bullish pressure, though attempts to break higher have stalled.
- The Relative Strength Index (RSI) stands at 64 (bullish territory), and the MACD stays above the signal line.
- Price action is testing resistance near 1.1760, with a break above likely targeting 1.1790, a key trendline level.
- A successful move beyond 1.1790 could shift focus to the September 23–24 highs near 1.1820.
Support levels to watch:
- 1.1710–1.1715 (recent intraday base)
- 1.1645–1.1655 (last week’s lows)
- 1.1610 (early September lows)
Bottom Line
EUR/USD remains in a recovery phase but lacks follow-through after Eurozone inflation data confirmed expectations. The pair continues to benefit from USD weakness linked to the US government shutdown and soft labor data, but key resistance levels are proving tough to crack. All eyes now turn to upcoming ADP payrolls and ISM manufacturing data for the next directional cue.