The EUR/USD pair extended its upward momentum for the fourth consecutive session on Friday, trading around 1.1710 during Asian hours. The Euro (EUR) found additional support after France’s government narrowly survived a no-confidence vote, while persistent weakness in the US Dollar (USD) continued to underpin the pair’s advance.
Political stability in France bolsters the Euro
France’s Prime Minister Sebastien Lecornu managed to secure parliamentary backing on Thursday after pledging to suspend a controversial pension reform plan. The move helped defuse political tensions and won the support of some left-wing lawmakers, easing immediate fears of a government collapse.
The outcome provided a modest boost to the euro, reinforcing confidence in the region’s political stability amid a broader backdrop of economic uncertainty.
ECB policymakers push back against further rate cuts
The euro also gained traction as comments from European Central Bank (ECB) officials suggested the bank may be nearing the end of its rate-cut cycle. ECB policymaker and Maltese central bank governor Edward Scicluna warned against rushing into additional easing, noting uncertainty over whether higher trade tariffs would have a disinflationary or inflationary effect.
Similarly, ECB Governing Council member Martin Kocher said he believes the rate-cut cycle is “at or near its end,” emphasizing the need to “keep powder dry for potential crises.”
These statements reinforced market expectations that the ECB will maintain its current policy stance for the time being, providing a tailwind for the common currency.
Weak US Dollar extends euro’s rally
On the other hand, the US Dollar remained under broad selling pressure amid the prolonged US government shutdown and mounting expectations of further Federal Reserve (Fed) rate cuts. The political gridlock in Washington shows no signs of easing after the Senate failed once again—its tenth attempt—to pass a short-term funding bill on Thursday, extending the 16-day shutdown into next week.
The ongoing impasse, combined with dovish signals from Fed officials, has deepened concerns over US economic momentum, driving the USD Index (DXY) to its lowest level in more than a week.
Technical outlook
EUR/USD continues to trade comfortably above the 1.1700 psychological level, with momentum indicators pointing to further upside potential. The next key resistance is seen near 1.1740, followed by 1.1780. On the downside, immediate support lies at 1.1675, followed by 1.1650. A sustained move above 1.1740 could open the path for a test of the late-September high near 1.1800.
