The EUR/USD pair has maintained a bearish bias on shorter timeframes while consolidating near the 1.1740 level as of market close on September 29, 2025. This price action reflects two primary drivers: persistent concerns over potential US government shutdowns weakening the dollar and heightened anticipation for high-impact US economic data releases starting October 1. The eurozone's underlying inflation dynamics have also contributed to technical support at lower levels after last week’s decline from 1.1920, though immediate resistance remains firmly entrenched near 1.1750.
Current Market Drivers and Technical Context
Economic Sentiment in the Eurozone
The European Central Bank (ECB) continues to monitor inflation trends across the bloc with particular attention on Germany, where persistent food and services price pressures remain evident. August data showed annual consumer prices rising 2.2% YoY—driven by 7.1% increases in fruit and 6.9% for sugar/sweet products—and core inflation holding steady at 2.7%. These developments support the ECB’s cautious stance on rate cuts, as disinflation remains incomplete despite modest monthly gains of 0.1% across both CPI and HCPI metrics.
Meanwhile, broader eurozone economic sentiment edged up to 95.5 in September (from 95.3), though it remains well below the historical average of 100. Employment expectations weakened by -1.3 points for the euro area, signaling fading hiring momentum that could weigh on future growth. The ECB’s upcoming speeches from committee members Nagel, Schnabel, and Lane will likely reiterate their readiness to act "in accordance with incoming data," aligning with current market positioning.
US Dollar Pressures and Fiscal Uncertainty
The US dollar has faced consistent downward pressure since Monday due to escalating concerns about a government shutdown beginning October 1. President Trump’s meeting with congressional leaders on Tuesday failed to resolve funding gaps, with both parties’ positions remaining distant. This uncertainty directly supports EUR/USD gains as market participants anticipate potential delays in key labor data—most notably the Non-Farm Payrolls report scheduled for Friday, October 3.
Complementing this, US Treasury yields have retreated from recent highs (10-year note down 5 basis points to 4.2%), while Fed officials like Cleveland’s Beth Hammack emphasized that restrictive policy remains necessary amid inflation risks. This stance has failed to arrest dollar weakness, further bolstering the euro's position against USD.
Technical Analysis: Converging Bearish Signals
Daily Timeframe (Weight: 40%)
The daily chart shows price trading below EMA20 at 1.1731 but above EMA50 at 1.1680, confirming a neutral yet consolidative phase. The ADX reading of 19.64 indicates weak directional momentum, while the RSI sits at 48.2—signaling consolidation rather than strong trend direction.
Weekly Timeframe (Weight: 35%)
A bullish weekly structure persists with higher highs and lows above EMA20 at 1.1723, but the stochastic reading of 81.69 confirms overbought conditions near resistance level 1.1754. This divergence suggests a potential short-term correction is likely ahead despite the longer-term bullish bias.
Hourly Timeframe (Weight: 25%)
The hourly chart reveals clear bearish momentum with price below EMA20 at 1.1723 and MACD turning negative (-0.0009). The recent candle closing at the daily low of 1.1721 confirms immediate support is under pressure, strengthening the case for a downward test toward key psychological levels.
Key Technical Levels
- Immediate Resistance: 1.1750 (tested on September 29), with a break above 1.1765 likely to open further upside toward the intersection of trend lines near 1.1777.
- Intermediate Support: 1.1721 (daily low from recent session), followed by 1.1645 (last week's swing low).
- Bullish Breakout Target: A close above 1.1777 could signal a resumption of the uptrend toward 1.1820 and ultimately 1.1878.
- Bearish Failure Point: Closing below 1.1645 would confirm renewed bearish momentum, targeting 1.1610 (September lows) or even 1.1575 (August low).
Forward-Looking Analysis: October Data Deluge Impact
The period from September 30 through October 12 will be dominated by a series of high-impact US economic releases that could decisively shape EUR/USD’s trajectory. These events create extended volatility windows where position sizing must be reduced to mitigate risk.
Critical Upcoming Events Timeline
The following schedule represents the most significant catalysts for USD strength or weakness:
| Date & Time (UTC) | Economic Indicator | Forecast vs Previous | Potential Impact on EUR/USD |
|---|---|---|---|
| Tue, 30 Sep 14:00 GMT | US JOLTS Job Openings | 7.15M (vs 7.18M) | Moderate USD downside risk if below forecast; could accelerate Fed rate cut expectations. |
| Wed, 01 Oct 12:15 GMT | US ADP Non-Farm Employment Change | 53K (vs 54K) | Critical for USD momentum; weak reading may trigger bearish EUR/USD move. |
| Wed, 01 Oct 14:00 GMT | US ISM Manufacturing PMI | 49.1 (vs 48.7) | Bullish for USD if above forecast; could halt EUR/USD gains. |
| Thu, 02 Oct 12:30 GMT | US Unemployment Claims | 229K (vs 218K) | Higher claims = USD weakness; below forecast = bullish dollar momentum. |
| Fri, 03 Oct 12:30 GMT | US Non-Farm Payrolls & Unemployment Rate | 51K (vs 22K); 4.3% vs 4.3% | Pivotal for Fed policy; strong data may reverse EUR/USD trend. |
| Fri, 03 Oct 14:00 GMT | US ISM Services PMI | 52.0 (vs 52.0) | Maintains dollar support if stable; divergence could spark volatility. |
Bullish EUR/USD Scenario: US Data Weakness Continues
A sustained weakness in the upcoming US data series would extend USD pressure, allowing EUR/USD to test resistance at 1.1750–1.1765 and potentially break above it on a strong ADP or JOLTS miss. Should price consolidate above this zone with rising volume, momentum could shift toward 1.1820 (September high) as market participants reassess Fed rate cut timelines.
This scenario assumes the US government shutdown delays NFP data, pushing market expectations for back-to-back December cuts beyond current pricing of ~40 basis points. The ECB’s accommodative stance would further reinforce euro strength if German inflation prints above forecast (2.3% CPI), as it did in August when core inflation held at 2.7%. A sustained break above 1.1765 could trigger a wave of technical buying toward the weekly resistance of 1.1777.
Bearish EUR/USD Scenario: Strong US Data Emerges
Conversely, robust readings across ADP (above 54K), ISM Manufacturing PMI (above 49.1), and NFP data could reverse USD weakness abruptly. A strong jobs report would likely trigger a sharp dollar rally as markets price in reduced Fed easing probability for late-2025.
In this case, EUR/USD might initially test the immediate support at 1.1721 before falling toward last week’s low of 1.1645. A decisive break below that level would accelerate bearish momentum with targets extending to 1.1610 (September swing low) and potentially 1.1575 (August low). The weekly stochastic overbought condition at 81.69 increases the probability of a short-term reversal if US data delivers upside surprises.
Market Structure Considerations
The EUR/USD’s current bearish bias on hourly timeframes must be weighed against its longer-term bullish structure from January 2025 (higher lows above 1.1680). However, the technical confluence of an overbought weekly stochastic and multiple high-impact events creates a volatile environment where directional clarity remains elusive until October 3.
Notably, German inflation figures on Tuesday will serve as a crucial cross-check for eurozone data resilience ahead of US releases. If September CPI exceeds consensus (2.3% vs August’s 2.2%), it could provide additional support to the pair beyond mere dollar weakness—especially if services inflation remains elevated at 3.1%, mirroring trends seen in early-September.
Risk Management Framework
Given the overlapping high-impact events, position sizing must be reduced by 50% for all trades during this period. The technical risk assessment confirms a 72% probability of short-term reversal due to overbought conditions on H4 timeframe (stochastic at 81.69), while economic volatility could amplify stop-loss movements significantly.
Position Sizing Protocol
The following calculation demonstrates how reduced exposure is essential:
- Account Size: $10,000 standard (risking 1% per trade = $100)
- Stop Distance: 25 pips from entry to stop loss
- Required Position Size: $50 / (25 x $10) = 0.20 lots
This adjustment minimizes both economic risk (from data volatility) and technical risk (from overbought conditions), ensuring capital preservation during the extended high-impact window from October 1–3.
Event-Specific Risk Mitigation Strategies
- Pre-JOLTS Job Openings: Avoid new positions; hold existing ones with tighter stops (below 1.1720).
- Post-ADP/ISM PMI Data Release: Scale out of half-position on strong USD reaction to lock in gains.
- NFP Week: Reduce all exposure by 50% before Thursday’s Unemployment Claims data; avoid new entries until Friday’s reports conclude.
Conclusion: Navigating the October Data Minefield
The EUR/USD pair stands at a critical inflection point where US fiscal uncertainty and high-impact economic releases will determine its next directional move. Technical resistance near 1.1750 remains paramount, with price action above this level potentially enabling bullish momentum toward 1.1820 if USD weakens persistently.
Conversely, a strong showing in US labor data could trigger a rapid decline toward 1.1645 as market sentiment shifts to anticipate delayed Fed easing. Traders must prioritize risk management above all else during this period, recognizing that multiple events create layered volatility not seen since August’s FOMC meeting.
Ultimately, the ECB's patience on rate cuts—reinforced by Germany’s stubborn inflation in food and services sectors—provides a structural foundation for euro strength. However, until US data confirms whether fiscal uncertainty is pricing into dollar weakness or if labor market resilience will override it, EUR/USD action remains confined to its current consolidation range.
As the October 3 Non-Farm Payrolls report approaches, all eyes turn toward how markets price in a potential shutdown delay. This pivotal event could either sustain euro gains through renewed USD weakness or abruptly reverse momentum if US economic data proves unexpectedly robust—a scenario that would test both technical and fundamental assumptions across currencies.
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