EUR/USD picks up on concerns about a potential US government shutdown
- The Euro appreciates to the 1.1725 area on concerns about a possible government shutdown in the US.
- US President Trump will meet congressional leaders 24 hours before the deadline in an attempt to avert the shutdown.
- Technically, the pair maintains the bearish structure from 1.1920 highs intact.
EUR/USD opened the week in a moderately bid tone, extending its recovery to 1.1725 at the time of writing on Monday, after bouncing from 1.1645 lows last week. Investors' concerns about a highly likely US government shutdown this week and hopes of back-to-back Federal Reserve (Fed) interest rate cuts have sent US Treasury yields and the US Dollar (USD) lower across the board.
The main focus on Monday is on US President Donald Trump, who will hold a meeting with Republican and Democratic representatives in the last attempt to avoid the closure of the government on Wednesday, which is the first day of the 2026 fiscal year.
Chances of a last-minute agreement, however, seem remote, as the positions of both parties are far apart. The consequences of a shutdown tend to be bearable, unless it is a protracted one, but in this case, it might delay the release of the key Nonfarm Payrolls report due on Friday, which could seriously complicate the Fed's rate-setting activity if the data is not released before the central bank's meeting on October 28.
In the macroeconomic domain, the Eurozone's Consumer Confidence data and a slew of European Central Bank (ECB) speakers will provide some fundamental context for the Euro, while in the American session, a slew of Fed officials are likely to offer further clues about the bank's near-term monetary policy.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.19% | -0.34% | -0.46% | -0.08% | -0.31% | -0.04% | -0.18% | |
| EUR | 0.19% | -0.15% | -0.44% | 0.10% | -0.12% | 0.14% | -0.00% | |
| GBP | 0.34% | 0.15% | -0.16% | 0.25% | -0.03% | 0.30% | 0.15% | |
| JPY | 0.46% | 0.44% | 0.16% | 0.42% | 0.19% | 0.30% | 0.33% | |
| CAD | 0.08% | -0.10% | -0.25% | -0.42% | -0.20% | 0.04% | -0.10% | |
| AUD | 0.31% | 0.12% | 0.03% | -0.19% | 0.20% | 0.27% | 0.12% | |
| NZD | 0.04% | -0.14% | -0.30% | -0.30% | -0.04% | -0.27% | 0.00% | |
| CHF | 0.18% | 0.00% | -0.15% | -0.33% | 0.10% | -0.12% | -0.00% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: Government shutdown fears keep the US Dollar on its back foot
- The possibility of a US government shutdown is likely to be front and center on Monday, keeping the US Dollar under pressure. In the absence of more relevant macroeconomic data, all eyes are on Trump's meeting with bipartisan congressional leaders, only 24 hours before the deadline to avoid the closure of the federal government.
- US Treasury yields are pulling back from recent highs. The yield of the benchmark 10-year note has retracted 5 basis points from last week's highs at 4.2%, and the 2-year note is showing a similar behaviour, pulling back from 3.67% highs on Friday to 3.63% on Monday's early European trading.
- In the macroeconomic data front, the Eurozone's final Consumer Confidence reading is expected to confirm preliminary figures showing a mild improvement to -14.9 in September, from -15.5 in August. These figures, however, are well below the historical average and reflect Eurozone consumers' concern about the uncertain economic context.
- Somewhat later, ECB committee members Joachim Nagel, Isabel Schnabel, and Philip Lane are due to speak, and will likely say that the bank is well-positioned to cope with an uncertain scenario and will act in accordance with incoming data.
- In the US, the focus will be on the speeches of Fed Governor Christopher Waller, Cleveland Fed President Beth Hammack, St. Louis Fed President Alberto Musalem, New York Fed President John Williams, and Atlanta Fed President Raphael Bostic, scheduled throughout the American session.
- On Friday, the US Personal Consumption Expenditures Price Index confirmed market expectations of steady inflationary pressures and kept hopes of back-to-back Fed rate cuts alive. Data from the US Bureau of Economic Analysis showed that yearly inflation ticked up to 2.7% in August from 2.6% in July, while the core inflation rose at a steady 2.9% yearly pace, in line with expectations.
Technical Analysis: EUR/USD eyes resistances at 1.1730 and 1.1760
EUR/USD is moving up on Monday, yet with technical indicators on the 4-hour chart mixed. The Moving Average Convergence Divergence (MACD) shows a bullish crossover, but the Relative Strength Index (RSI) is struggling to return above the key 50 level, which suggests that the upward trend is frail. The pair broke below an ascending trendline last week, highlighting a potential trend shift and might be on a corrective recovery, ahead of further depreciation.
The September 19 and 20 lows, around 1.1730, are now acting as resistance, ahead of the reverse trendline, now at 1.1765. The pair should return above those levels to break the immediate bearish structure and shift the focus back to the September 23 and 24 highs, at 1.1820.
To the downside, support is located in the 1.1645-1-1455 area, which held the pair last week and also on September 11. Further down, the September 2 and 3 lows, near 1.1610 and the August 27 low, at 1.1575, would be the next targets.
Euro FAQs
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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