EUR/USD traded flat on Friday’s North American session, holding near 1.1736 and set to close the week with modest gains of 0.18%. Markets have fully priced in a 25-basis-point Federal Reserve rate cut at next week’s policy meeting, as signs of a weakening US labor market weigh on the dollar.
Euro ends week higher as US data cements dovish Fed outlook
US data releases drove market sentiment this week, with downward payroll revisions, rising jobless claims, and weaker consumer sentiment pointing to a slowing labor market. The University of Michigan’s Consumer Sentiment Index dropped to 55.4 from 58.2, while longer-term inflation expectations climbed to 3.9%, remaining well above the Fed’s 2% target.
Traders now assign a 90% probability to a 25-bps Fed cut at the September 16–17 FOMC meeting and a 10% chance of a deeper 50-bps move, according to Prime Market Terminal data. Fitch Ratings projects two additional cuts this year—in September and December—followed by further easing in 2026.
Across the Atlantic, the ECB left rates unchanged, with President Christine Lagarde stressing a data-dependent approach and signaling that disinflationary pressures have faded. The bank maintained a cautious stance as risks to eurozone growth remain tilted to the downside.
Technical outlook
EUR/USD remains steady around 1.1730 after Thursday’s bullish engulfing candle failed to extend higher. The Relative Strength Index is flat, underscoring a lack of momentum.
A sustained daily close above 1.1750 would open the door toward 1.1800 and the year-to-date peak at 1.1829. On the downside, a break below 1.1700 would expose initial support at the 20-day SMA at 1.1677, followed by the 50-day SMA at 1.1658.
