The high for the EUR/USD last week actually took place on early Monday when the 1.16650 area was traded briefly. A low for the currency pair was seen on Wednesday around the 1.15770 ratio.
Going into Friday of this past week the EUR/USD was around the 1.16100 mark before the U.S Consumer Price Index figures were released (this after a one and a half week delay in the data due to the U.S government shutdown).
When the U.S inflation reports came in slightly weaker than anticipated the EUR/USD jumped to a high of around 1.16500 before reversing lower.
Nervous conditions are prevalent in Forex including the EUR/USD. Choppy conditions have been seen for more than a handful of week as currencies teamed against the USD fight a lack of clarity from the U.S Federal Reserve and a lack of U.S economic data. Even though the CPI numbers came in weaker than forecast this past Friday, the surge higher in the EUR/USD was not able to be sustained. And the high seen this past Friday was below the highs seen earlier in the week.
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Federal Reserve’s FOMC Statement on Wednesday
This coming Wednesday the U.S Federal Reserve will make its FOMC decision. Unless there is a vast surprise coming from bad international news or another avenue, the Fed will definitely cut its Federal Funds Rate by 25 basis points on the 29th of October. This number has been baked into the EUR/USD already. And some believe another rate cut has been traded into the value of the EUR/USD too. Meaning some analysts believe financial institutions have looked ahead into December and believe the Fed will cut once again then.
The EUR/USD continues to linger in what may be considered lower ratios technically. Via one and three month charts the EUR/USD does look like it is low. However, the broad Forex market has been extremely choppy since the beginning of 2025. This has a lot to do with the current White House administration, but also a lot to do with the Federal Reserve’s rather cautious FOMC Statements over the past year.
Further Clouds and Uncertainty From The Fed
While Fed Chaiman Jerome Powell has sounded more dovish the past month, the Fed has still only lowered the Fed Funds Rate by 25 basis points the entire year. While another one will happen on Wednesday, the Fed should have cut interest rates more aggressively the past handful of months.
- The lack of U.S economic data because of the U.S government shutdown the past three weeks does not help.
- The Fed doesn’t have its full arsenal of government statistics to gauge, meaning the central bank may use the words uncertainty again this coming week a bit too much for financial institutions.
- Choppy conditions may prevail.
- The EUR/USD did show an ability to traverse higher this past Friday and it is tempting to believe in more upside.
- But financial institutions want to hear about firm decisions regarding interest rate cuts.
EUR/USD Weekly Outlook:
Speculative price range for EUR/USD is 1.15910 to 1.17500
The EUR/USD has been choppy yet consolidated. The temptation to believe the EUR/USD will climb back above the 1.17000 level and traverse values it saw in early October are logical, but day traders should wait for financial institutions to show they have enough muscle to prove resistance levels are vulnerable and higher values are durable. The inability of the EUR/USD to keep values above the 1.16500 for more than a couple of days needs to be proven attainable first.
Early trading this week may see financial institutions start to position on speculative outlooks regarding the Federal Reserve. Day traders looking for upside should not get overly ambitious and use take profit orders to cash out winnings if they develop. Looking for upside in the EUR/USD feels more logical than a burst of lower values below the 1.16000 suddenly languishing stubbornly. Volatility will happen this week because of the Fed’s FOMC Statement this coming Wednesday, speculators need to brace for swift conditions.
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