EUR/USD holds steady on Friday, trading around 1.1630 just below Thursday’s three-week peak at 1.1655 and is on course to finish the week roughly 0.6% higher. While Eurozone Gross Domestic Product (GDP) confirmed preliminary estimates and the Trade Balance widened, the broader risk-off environment kept the Euro (EUR) subdued through most of the European session.
Eurozone GDP showed the bloc expanded 0.2% in the three months to September, while annual growth was revised up to 1.4% from 1.3%. Meanwhile, the region’s September trade surplus widened sharply to EUR 19.4 billion, compared with August’s upwardly revised EUR 1.9 billion.
The US Dollar (USD) has remained on the defensive throughout the week despite hawkish messaging from Federal Reserve (Fed) officials. On Thursday, St. Louis Fed President Alberto Mussalem and Cleveland Fed President Beth Hammack reiterated concerns about persistent inflation, while Minneapolis Fed President Neel Kashkari struck a more balanced tone.
Daily digest market movers: euro supported by us dollar softness
The Euro has been buoyed primarily by USD weakness rather than domestic data. Traders remain hesitant to build large USD-long positions amid the ongoing US data blackout, and the market has largely shrugged off the Fed’s hawkish rhetoric. The backlog of delayed US economic figures—expected next week—is set to play a key role in shaping the greenback’s short-term direction.
On Thursday, Fed’s Hammack said monetary policy is only “barely restrictive” and argued that rates must remain high enough to meaningfully curb inflation, indicating opposition to a December cut.
St. Louis Fed President Mussalem emphasized inflation as the central bank’s primary concern, noting the Fed has “limited room to ease without becoming overly accommodative.”
In separate remarks, Fed’s Kashkari highlighted the resilience of the US economy and urged caution on further easing. He added that he remains undecided regarding a December rate move and has no strong bias toward a cut.
In Europe, ECB council member and Bank of Latvia Governor Martins Kazaks noted that the impact of US tariffs has been milder than feared and that eurozone interest rates are likely to remain steady unless economic conditions shift significantly.
Technical analysis: testing support at reverse trendline near 1.1610
EUR/USD breached the upper boundary of a descending channel traced from the early October highs and is consolidating gains heading into the weekend. Technical indicators remain constructive, but momentum shows early signs of fatigue.
The 4-hour Relative Strength Index (RSI) is approaching overbought territory after an eight-day rally, while the MACD appears poised for a bearish signal-line crossover—both hinting that consolidation may be on the horizon.
To preserve the bullish structure, buyers must defend the former channel top near 1.1610. A hold above this level keeps the focus on the October 28–29 highs around 1.1670, followed by the October 17 swing high near 1.1730.
A break below 1.1610, however, would expose support at the November 12 low near 1.1575 before the next key area at 1.1530–1.1540, corresponding to the November 7 and 10 lows.
