The EUR/USD pair pulled back from two-week highs just above 1.1630 but continues to trade with a positive tone, hovering near 1.1615 during Thursday’s session. The Euro remains supported by a firmer risk appetite following the end of the US government shutdown, which helped offset weaker Eurozone Industrial Production data.
Eurozone Data Misses Expectations
According to Eurostat, Industrial Production in the Eurozone rose by 0.2% in September, following an upwardly revised 1.1% decline in August. On an annual basis, output expanded by 1.2%, steady from the previous month but below consensus estimates of 0.7% monthly and 2.1% yearly growth.
The softer data limited the Euro’s recovery; however, overall sentiment toward riskier assets improved as investors welcomed the reopening of the US federal government after a 43-day shutdown.
US Developments: Shutdown Ends, Fed Officials Diverge
Market optimism followed President Donald Trump’s signing of a bill to reopen the government, ending the longest shutdown in US history. The move is expected to unlock a backlog of delayed macroeconomic reports, although the White House warned that some October data—such as employment and inflation—may not be published.
On Wednesday, Federal Reserve officials continued to express differing views on policy direction.
- Fed Governor Stephen Miran reiterated his stance that monetary policy remains “too restrictive,” arguing that rate cuts are necessary to support the labor market.
- In contrast, Atlanta Fed President Raphael Bostic downplayed labor market weakness, emphasizing the risk of reigniting inflation if rates are cut too aggressively.
Bostic also confirmed he will retire at the end of his term in February 2026, potentially allowing President Trump to appoint a more dovish successor.
Meanwhile, the CME FedWatch Tool shows that market odds of a 25-basis-point rate cut in December have eased to 54%, down from 67% a week earlier and 95% a month ago.
Eurozone Inflation: German CPI Slightly Eases
German inflation data confirmed a mild slowdown in October. The Harmonized Index of Consumer Prices (HICP) rose 0.3% month-on-month and 2.3% year-on-year, down slightly from 2.4% in September. Similarly, the national CPI increased 0.3% in October but eased to 2.3% year-on-year from 2.4% previously.
Currency Performance: Euro Supported by Risk-On Flows
| Base Currency | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| EUR | +0.13% | — | +0.05% | +0.16% | +0.11% | -0.37% | +0.11% | -0.01% |
The Euro gained most strongly against the Japanese Yen, reflecting investors’ return to riskier assets amid a weaker US Dollar (USD).
Technical Outlook: EUR/USD Tests Channel Resistance
On the 4-hour chart, EUR/USD has broken above the upper boundary of a descending channel that began in early October. The Relative Strength Index (RSI) remains in bullish territory, nearing overbought levels, while the MACD is on the verge of crossing below the signal line—indicating that upside momentum may be losing steam.
- Resistance: 1.1670 (October 28–29 highs), 1.1730 (October 17 high)
- Support: 1.1620–1.1625 (former resistance area), 1.1565 (recent low), 1.1530–1.1540 (November 7–10 lows), 1.1500 (psychological level), and 1.1470 (November 5 low)
Bulls will aim to hold above 1.1615–1.1625 to confirm a potential trend reversal, while a sustained break below 1.1565 could signal renewed weakness.
Market Summary
- EUR/USD trades near 1.1615, supported by improved risk sentiment.
- Eurozone data disappoints but fails to derail upside momentum.
- Fed policy divergence and a softer USD remain key short-term drivers.
- Technical outlook shows potential for further gains, though momentum appears to be slowing.