11/08/25

21

The EUR/USD currency pair remained near 1.1650 during Monday’s European trading session, with limited movement amidst subdued market activity. The pair continues to reflect a cautious outlook, with technical indicators suggesting the underlying bullish trend remains intact but lacking strong momentum at this stage.

In recent comments, Federal Reserve Governor Michelle Bowman highlighted concerns regarding the fragility of the U.S. labor market, emphasizing that softer employment data could justify multiple interest rate cuts in the current year. Her outlook appears to temper prospects for immediate dollar strength, especially as investors await key upcoming U.S. inflation figures due for release on Tuesday. This uncertainty has prompted traders to adopt a cautious approach, slowing large bets on the dollar ahead of the data.

Market attention is also focused on the unfolding U.S.-China trade negotiations, with the August 12 deadline for a deal rapidly approaching. Any indication of progress, such as an extension of the current timeline, could spark risk-on sentiment, potentially weighing on the U.S. dollar. Conversely, if negotiations stall and tariffs escalate, risk aversion may prevail, potentially bolstering the dollar and pressuring the euro lower.

From a technical perspective, the EUR/USD remains above the 50-period moving average but below the 200-period moving average at approximately 1.1670. A close above this level could open the door to near-term resistance around 1.1700 and then 1.1760. On the downside, support levels are identified near 1.1625, 1.1570, and 1.1540, corresponding to various moving averages and Fibonacci retracement levels.

The euro continues to represent a significant share of the global foreign exchange market, accounting for approximately 31% of all daily transactions. The European Central Bank’s monetary policy, especially its interest rate decisions, plays a crucial role in shaping euro dynamics. Inflation data and economic indicators from the eurozone’s largest economies are equally influential, as they guide the ECB’s policy actions and affect the euro’s valuation. Strong economic data and rising inflation may prompt the ECB to tighten policy, potentially supporting the euro, while softer figures could weigh on the currency.