Euro weakens amid cautious market tone
The Euro (EUR) has dipped to weekly lows below 1.1585 after failing to hold above the 1.1600 level. The pair remains under pressure, with investors hesitant to take on excessive risk amid cautious market sentiment.
EUR/USD breached Monday’s low at 1.1585 and is currently trading around 1.1580. Traders are holding back from making directional bets on the US Dollar (USD) ahead of a wave of delayed economic reports expected later this week.
Data released on Monday from the United States beat expectations. The New York Empire State Manufacturing Index surged to 18.7 in November—its highest reading in nearly a year—while construction spending in August rose 0.2%, defying forecasts of a 0.1% decline. July’s figure was also revised upward from a 0.1% contraction to a 0.2% gain.
Meanwhile, Federal Reserve Governor Christopher Waller cautioned that the rise of Artificial Intelligence (AI) could reduce labor demand among US businesses. He emphasized that the central bank must be prepared to respond with interest rate cuts if necessary.
Despite these developments, market expectations for a rate cut by the Federal Reserve in December remain below 50%, with investors awaiting further data. While the European economic calendar is quiet on Tuesday, the United States will release the ADP weekly employment report and Factory Orders data, which may influence the Dollar’s direction. The key highlight of the week will be Thursday’s Nonfarm Payrolls report for September.
The Euro showed mixed performance against major currencies, with its strongest gains against the Japanese Yen. Here's a snapshot of percentage changes
The Euro has recovered some of its earlier losses but continues to trade within a narrow range. Traders are awaiting more data from the United States to assess the economic outlook and the Federal Reserve’s policy stance.
Monday’s stronger-than-expected data, including the Empire State Manufacturing Index and construction spending, added to optimism. Factory Orders for August are expected to rebound by 1.4%, following a 1.3% decline in July—the last release before the US government shutdown.
Speeches from Federal Reserve Governor Michael Barr and Richmond Fed President Thomas Barkin may also provide further insight into the December policy meeting.
EUR/USD has come under renewed bearish pressure after failing to break above 1.1600. The 4-hour Relative Strength Index (RSI) remains capped below 50, and the MACD continues to trend lower—suggesting a deeper correction may be underway.
The pair is pulling back from trendline resistance. If it confirms a break below Monday’s low at 1.1585, the next support levels are the November 7, 10, and 11 lows in the 1.1535–1.1545 range, followed by the November 5 low near 1.1470.
To the upside, the 1.1610 area—previously a support zone—may challenge bullish momentum, with further resistance at 1.1635 and the October highs near 1.1670.