The EUR/USD is currently holding steady, but the economic landscape is a whirlwind of activity. The currency pair is experiencing minor gains, hovering around 1.1650 as of Friday. However, it faced resistance at 1.1675 earlier in the European session. Despite this, the downside appears limited, as the market anticipates a potential quarter-point interest rate cut from the Federal Reserve next week.
Let's dive deeper into the factors influencing this movement.
Economic Data's Influence
Thursday's economic data provided some interesting insights. US initial Jobless Claims unexpectedly decreased in the last week of November. But here's where it gets controversial: some experts suggest that the Thanksgiving holiday might have skewed these figures.
Furthermore, US Challenger Job Cuts saw a significant 53% drop in November, falling to 71,321 from 153,074 the previous month. However, hiring plans remain stagnant, adding to the uncertainty surrounding the economic outlook.
Eurozone Focus
The Eurozone is also in the spotlight. The third estimate of the Q3 Gross Domestic Product (GDP) and Employment Change for the same period will be released during the European session. However, the main focus will be on the delayed US Personal Consumption Expenditures (PCE) Price Index for September, which is the last inflation gauge before next week's Fed monetary policy meeting.
Euro Performance Today
The Euro's performance against major currencies varies. It was the strongest against the US Dollar.
Here's a snapshot of the percentage changes:
| Currency | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
| :------- | :------- | :------- | :------- | :------- | :------- | :------- | :------- | :------- |
| USD | - | -0.15% | -0.12% | -0.08% | -0.20% | -0.09% | -0.08% |
| EUR | 0.07% | - | -0.08% | -0.07% | -0.01% | -0.12% | -0.02% | -0.02% |
| GBP | 0.15% | 0.08% | - | 0.08% | -0.04% | 0.06% | 0.07% |
| JPY | 0.12% | 0.07% | 0.00% | - | 0.05% | -0.07% | 0.02% | 0.04% |
| CAD | 0.08% | 0.00% | -0.08% | -0.05% | - | -0.13% | -0.03% | -0.00% |
| AUD | 0.20% | 0.12% | 0.04% | 0.07% | 0.13% | - | 0.10% | 0.11% |
| NZD | 0.09% | 0.02% | -0.06% | -0.02% | 0.03% | -0.10% | - | 0.01% |
| CHF | 0.08% | 0.02% | -0.07% | -0.04% | 0.00% | -0.11% | -0.01% | - |
Market Movers and Key Observations
- The US Dollar is on the defensive: It remains the weakest performer among the G8 currencies this week. The weak ADP Employment Change report has fueled expectations of a Fed rate cut next week. In contrast, positive manufacturing data in Europe has supported the Euro.
- Eurozone Retail Sales disappointment: October's Retail Sales showed 0% growth, falling short of the expected 0.1%. While September's data was revised upwards, the Euro experienced a brief pullback after the release.
- Initial Jobless Claims: The US Initial Jobless Claims dropped to 191,000 in the last week of November, the lowest in three years. However, the market approached these figures with caution due to potential holiday-related distortions.
- Rate Cut Expectations: Futures markets predict an 87% chance of a 25 basis points Fed interest rate cut at the December 10 meeting, with two to three more cuts expected next year.
- Political Influence: News about Kevin Hassett potentially replacing Jerome Powell as the next Fed chairman is also impacting the US Dollar. Some bond investors have voiced concerns that Hassett might pursue aggressive easing policies.
- Eurozone Focus: The focus in the Eurozone is on the Q3 GDP estimate, which is expected to confirm a 0.2% QoQ and 1.4% YoY growth. The Employment Change is also expected to show a 0.1% quarterly and 0.5% year-on-year growth.
- US Inflation: The US PCE Price Index is expected to show persistent inflation, with the headline reading reaching 2.8% year-on-year and the core reading at a steady 2.9%.
Technical Analysis: EUR/USD Outlook
The EUR/USD pair currently maintains its bullish trend, with support around the trendline at 1.1630. The 1.1670-1.1680 area continues to pose a challenge for the bulls. The 4-hour Relative Strength Index (RSI) is stable above the 50 level, currently at 61. However, the Moving Average Convergence Divergence (MACD) indicator has dipped below the zero level, suggesting a weakening bullish trend.
For the bulls to extend their rally, they need to break Thursday's high at 1.1682, potentially targeting the October 17 high near 1.1730 and the October 1 high at 1.1778.
On the other hand, a bearish reaction below 1.1630 could lead to a retest of the weekly lows at 1.1595. Further declines could target the November 26 and 28 lows in the 1.1550-1.1555 area.
Economic Indicators Explained
Gross Domestic Product (GDP): This crucial indicator, released quarterly by Eurostat, measures the total value of goods and services produced in the Eurozone. A rising GDP is generally positive for the Euro.
QoQ (Quarter-over-Quarter): This reading compares economic activity in the current quarter to the previous one.
- Next release: Fri Dec 05, 2025 10:00
- Frequency: Quarterly
- Consensus: 0.2%
- Previous: 0.2%
YoY (Year-over-Year): This reading compares economic activity in the current quarter to the same quarter a year earlier.
- Next release: Fri Dec 05, 2025 10:00
- Frequency: Quarterly
- Consensus: 1.4%
- Previous: 1.4%
What are your thoughts on the potential impact of these economic indicators on the EUR/USD? Do you anticipate a rate cut by the Fed, and how might that influence the market? Share your opinions in the comments below!
