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EUR/USD Holds Firm Despite Eurozone Data Miss as Risk Appetite Improves on U.S. Government Reopening
Traders' Opinions
Summary:
The euro steadied against the U.S. dollar on Wednesday, holding above the 1.16 level despite weaker-than-expected Eurozone industrial production data.
Buy
TradingEURUSD
EXP
1.16477
Entry Price
1.16800
TP
1.15700
SL
1.16190 -0.00148 -0.13%
0
Point
Flat
1.15700
SL
CLOSING
1.16477
Entry Price
1.16800
TP
The EUR/USD pair retreated modestly from two-week highs near 1.1630, trading around 1.1615 at the time of writing, as investors digested a cocktail of contrasting macroeconomic signals. The euro’s resilience came despite lackluster data from the Eurozone and uncertainty surrounding the delayed release of key U.S. economic reports due to the now-ended government shutdown.
A positive risk mood helped cushion the single currency’s downside, with markets finding relief in the end of the 43-day U.S. government shutdown, which had cast a shadow over global risk appetite. President Donald Trump’s signing of the bill to reopen the government allowed markets to breathe a sigh of relief, restoring some clarity to an otherwise data-starved trading environment. The move is expected to free a backlog of U.S. macroeconomic indicators that were frozen during the shutdown, although the White House has hinted that some crucial reports, including October’s employment and inflation figures, may never be released.
From a European standpoint, however, optimism remains tempered. Eurozone Industrial Production data released earlier in the day disappointed market expectations, revealing the fragility of the bloc’s manufacturing sector. Output rose 0.2% month-on-month in September, a modest rebound from the upwardly revised 1.1% contraction in August, but still well short of the 0.7% growth economists had forecast. On an annual basis, industrial activity expanded 1.2%, undershooting projections of a 2.1% increase, and signaling that the region’s industrial base continues to grapple with sluggish demand and high borrowing costs.
The euro’s muted reaction to the data underscores that the macro narrative remains dominated by U.S. developments, particularly the Federal Reserve’s policy outlook and the lingering uncertainty around delayed data releases. Market participants continue to parse comments from Fed officials, who remain divided over the path forward. On Wednesday, Governor Stephen Miran reiterated calls for additional rate cuts to support the economy, arguing that inflation remains subdued and policy tightening has gone too far. In contrast, Atlanta Fed President Raphael Bostic adopted a more cautious tone, suggesting that inflationary pressures could re-emerge and that the labor market, though cooling, remains fundamentally sound.
These diverging policy views have left traders in limbo, keeping the U.S. dollar’s trajectory tied to expectations for future Fed action. The Consumer Price Index (CPI) was expected to be the highlight of the trading day, but with no clarity on its release due to administrative delays, investors instead turned their focus to potential Fed commentary and the Monthly Budget Statement for clues on the central bank’s next moves.
Technical Analysis
Despite macro headwinds, technical indicators for EUR/USD remain broadly supportive. The pair recently broke through the key resistance level at 1.1595, confirming short-term bullish momentum and suggesting that the currency could target higher resistance zones near 1.1650 and 1.1680 in the sessions ahead. Price action continues to hold above the 50-day Exponential Moving Average (EMA50) — a bullish signal — while the overall structure suggests buyers remain in control despite intermittent pullbacks. The Relative Strength Index (RSI), however, hints at possible near-term exhaustion, signaling that upside momentum could face hurdles if sentiment shifts or if the dollar regains strength.
TRADE RECOMMENDATION
BUY EURUSD
ENTRY PRICE: 1.1615
STOP LOSS: 1.1570
TAKE PROFIT: 1.1680
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