EUR/USD recouped some of its earlier losses and climbed 0.16% in Friday’s late North American session, as both Europe and the US saw almost no major economic releases. With the US government shutdown entering its 38th day and a thin European calendar, the pair remained anchored near the familiar 1.1560 area.
Euro edges higher as traders shy away from the Dollar amid US shutdown
The dearth of US data has injected extra uncertainty into financial markets, reflected in the recent rout across Wall Street’s main indices. Beyond the ongoing shutdown, investors are also worried that AI-related stocks are overvalued, prompting broad sell-offs. Normally, a rise in risk aversion would boost the US dollar as a safe haven, but this time traders have favored the euro instead. The US Dollar Index (DXY), which measures the greenback against six major peers, slipped 0.16% to 99.53.
On the data front, the University of Michigan’s preliminary November Consumer Sentiment survey showed that US households grew more pessimistic about the economy. The same report indicated one-year inflation expectations dipped, while longer-term outlooks held steady. In New York, the Federal Reserve’s consumer expectations survey confirmed that one-year inflation expectations fell to 3.2% in October from 3.4% a month earlier, with three- and five-year forecasts unchanged at 3.0%.
In Europe, Germany’s September trade surplus narrowed to €15.3 billion—below the €16.8 billion consensus and down from the downward-revised €16.9 billion reported for August.
Euro performance against major currencies this week
This week the euro posted its strongest gains versus the New Zealand dollar and made modest advances against most other major currencies. The smallest moves were seen against the US dollar and Swiss franc, while losses were registered against the Australian and New Zealand dollars.
Daily market movers—EUR/USD likely to stay confined to 1.15–1.16
- US consumer confidence fell sharply to 50.3 in November from 53.6 in October, according to the UoM survey. One-year inflation expectations ticked up to 4.7% from 4.6%, while the five-year outlook eased to 3.6% from 3.9%.
- The New York Fed’s October report showed one-year inflation expectations at 3.2%, down from 3.4% in September; three- and five-year projections remained at 3.0%.
- Fed Vice Chair Philip Jefferson cautioned that the central bank should proceed carefully with further rate cuts as policy approaches neutrality. He noted that spotty government data due to the shutdown adds to the need for caution.
- In Europe, an unexpected drop in September retail sales weighed on the euro after earlier encouraging services-sector figures.
Technical outlook—bearish bias persists
Technically, EUR/USD remains tilted to the downside. Sellers have been unable to drive the rate toward the 200-day simple moving average (SMA) at 1.1344, but the overall bias remains negative. In the near term, a rally back above the 20-day SMA at 1.1592 and the 1.1600 area could open the door to a test of 1.1700. However, if the pair falls below 1.1500, the next downside target is the August cycle low around 1.1391. Momentum indicators still favor the bears, even as the RSI shows signs of buyers attempting to regroup.
