The EUR/USD pair advanced modestly on Friday, gaining 0.16% in late North American trading as investors turned cautious amid a prolonged US government shutdown and a quiet economic calendar on both sides of the Atlantic. With the federal closure stretching into its 38th day and limited new data from Europe, the pair held steady near 1.1560, moving within a narrow trading range.
Euro gains as traders turn away from the dollar amid shutdown
The absence of US economic updates added to market uncertainty, reflected in a broad decline across Wall Street indices. Concerns over inflated valuations in AI-related stocks sparked a sell-off in major US benchmarks, compounding investor unease surrounding the government impasse.
Despite the risk-off tone, traders favored the euro over the traditionally defensive US Dollar. The US Dollar Index (DXY), which tracks the greenback against six major currencies, slipped 0.16% to 99.53.
Recent US data painted a cautious picture of the economy. The University of Michigan (UoM) Consumer Sentiment Index for November dropped sharply to 50.3 from 53.6 in October, highlighting a decline in household confidence.
The survey also showed short-term inflation expectations rising slightly to 4.7%, while the five-year outlook eased to 3.6%. Meanwhile, the New York Fed’s October survey reported one-year inflation expectations down to 3.2% from 3.4%, with medium-term expectations steady at 3.0%.
In Europe, Germany’s trade surplus narrowed to €15.3 billion in September, falling short of the €16.8 billion forecast and below August’s downwardly revised €16.9 billion. The disappointing data, coupled with weaker retail sales, offset earlier optimism from the services sector and capped the euro’s upside momentum.
Daily digest market movers: EUR/USD remains rangebound between 1.15 and 1.16
Federal Reserve Vice Chair Philip Jefferson emphasized a cautious approach toward future rate cuts, noting that the central bank is nearing a neutral stance. He also highlighted that the ongoing government shutdown—and the resulting gap in official data—could complicate upcoming policy decisions.
With markets grappling with political gridlock, deteriorating sentiment, and mixed inflation signals, EUR/USD remains confined between 1.1500 and 1.1600. Broader direction is likely to depend on the resumption of key US data releases and clarity from the Fed on its rate trajectory.
EUR/USD technical outlook: downside bias persists despite short-term stability
From a technical perspective, EUR/USD remains tilted to the downside even as buyers attempt to stabilize the pair above 1.1550. Immediate resistance sits near the 20-day simple moving average (SMA) at 1.1592, followed by 1.1600. A sustained move above this level could open the door to a recovery toward 1.1700.
However, sellers retain the upper hand as long as the relative strength index (RSI) remains subdued. A break below 1.1500 would expose the August 1 cycle low at 1.1391, while a close beneath that level would confirm renewed bearish control.
