The EUR/USD slipped 0.10% on Friday but still ended the week 0.51% higher, supported by risk-off flows and growing expectations that the Federal Reserve could pause its easing cycle next month. Despite the late-week pullback, the pair held above the 1.1600 threshold, keeping the near-term outlook constructive.
Since Wednesday, most Fed officials have maintained a hawkish tone. Regional Fed presidents—including Beth Hammack, Raphael Bostic, Alberto Musalem, Susan Collins, Neel Kashkari and Jeffrey Schmid—continued to back a modestly restrictive policy stance.
More dovish voices came from Fed Governor Stephen Miran, San Francisco Fed President Mary Daly, and Governors Christopher Waller and Michelle Bowman, who highlighted signs of softening in the labor market.
Fed Chair Jerome Powell and New York Fed President John Williams kept to a neutral posture. Powell emphasized that a December rate cut is not a foregone conclusion, noting the lack of fresh economic data leaves multiple policy paths open.
Money market pricing reflected the uncertainty, with the probability of a 25-basis-point cut slipping to 56%, down from around 70% the previous year, according to Prime Market Interest Rate Probability tool.
Eurozone growth steady in Q3
Eurozone data showed Q3 GDP rising 0.2% on a quarterly basis. The annual reading was revised slightly higher to 1.4% from 1.3%, offering moderate support to the single currency.
Daily market movers: euro pares gains after hawkish fed commentary
The US Dollar Index (DXY) gained 0.08% to 99.31 as markets absorbed fresh remarks from Fed officials. Governor Stephen Miran reiterated his dovish stance, arguing that recent data should push policymakers toward caution, adding that relying too heavily on backward-looking indicators risks policy missteps.
Kansas City Fed President Jeffrey Schmid repeated his reasoning for dissenting against the latest rate cut, stressing that he views policy as “only modestly restrictive,” which he believes remains appropriate ahead of the December meeting.
EUR/USD technical outlook: pair holds firm above 1.1600
EUR/USD retains a mildly bearish structure as buyers continue to struggle with the 50-day Simple Moving Average at 1.1659. Short-term momentum has improved, however, with the Relative Strength Index trending higher and signaling strengthening bullish pressure. A clear break above the 50-day SMA would open the door toward 1.1700.
On the downside, a drop below 1.1600 would put initial support at the 20-day SMA near 1.1583, followed by the psychological 1.1500 handle. A deeper decline would expose the August 1 cycle low at 1.1391 as the next bearish target.
