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02/10/25
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EUR/USD Stabilizes Around 1.1750 Amid US Dollar Weakness and Political Uncertainty
The EUR/USD currency pair remains relatively stable, trading modestly higher around the 1.1750 level during Thursday’s European session. Following a day of near stagnation on Wednesday, the technical outlook suggests that the current bullish momentum persists, although resistance around 1.1770 may prove challenging to breach.
The US dollar exhibited weakness on Wednesday, pressured by ongoing political uncertainties related to the federal government shutdown. While macroeconomic data provided mixed signals, they failed to bolster the dollar’s recovery. Notably, the ADP report indicated a contraction of 32,000 private sector jobs in September, marking a significant slowdown from previous estimates. The earlier August figure was also revised considerably downward to reflect only a slight decline.
Data from the Institute for Supply Management’s manufacturing index showed a modest improvement in September, rising to 49.1 from 48.7 in August, yet still remaining within contraction territory. Components of the index offered further insights: the Prices Paid Index declined, signaling easing input costs, while the Employment Index edged higher but remained indicative of a weak labor market.
Further complicating the economic landscape, the failure of government officials to agree on budget measures resulted in the postponement of key economic reports, including weekly unemployment claims and factory orders. Instead, investors’ attention will focus on Challenger job cut figures for September, which, despite their lesser influence, could impact market sentiment depending on whether job cuts increase or decrease. Political developments in Washington continue to drive market sentiment. A positive outlook on the resolution of the government shutdown may lead to a renewed US dollar strength, potentially driving EUR/USD lower.
From a technical perspective, the 1.1750 level aligns with the 100-period SMA on the four-hour chart, acting as a pivot point. A decisive move above 1.1770, coinciding with a Fibonacci retracement level, could trigger further gains toward 1.1820 and possibly 1.1900, while support levels are identified around 1.1710-1.1700 and 1.1640, respectively.
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