EUR/USD steadies near $1.158 as traders weigh Fed cut bets against ECB’s calm stance

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Euro steadies near $1.158

Highlights

- EUR/USD holds near 1.1580 as markets await inflation and labor data.

- Traders price a 68% chance of a Fed rate cut in December.

- ECB maintains stability while U.S. fiscal optimism lifts the dollar short term.

On the daily chart, EUR/USD remains inside a descending channel, showing early signs of forming a base near 1.153, which aligns with the 0.382 Fibonacci retracement of the April–July advance. This zone has become a key line of defense for buyers. A rebound from this area could test the 1.162 resistance, where the 50-day EMA sits, followed by 1.165, the 0.618 Fibonacci and 100-day EMA confluence. A sustained close above 1.1728 would confirm bullish momentum and open the path toward 1.1800, the top of the channel.

EUR/USD price dynamics (Source: TradingView)

Momentum remains neutral. The RSI hovers near 45, showing a mild recovery from oversold territory without a strong bullish shift. The Supertrend indicator has just turned positive after several weeks of downside pressure, suggesting that the pair might be attempting to form a short-term floor. On the downside, the 200-day EMA near 1.1407 acts as the long-term safety net; a daily close below this level could drag the pair back toward 1.135.

Fed policy shifts contrast with ECB restraint

The euro’s steadiness comes as the ECB continues to emphasize stability. Policymakers, led by Vice President Luis de Guindos, signaled no rush to ease, noting that inflation is nearing the target and regional conditions remain manageable. Traders are now looking to Germany’s CPI and HICP data for confirmation that inflation continues to cool gradually, reinforcing the ECB’s measured stance.

Across the Atlantic, optimism about resolving the U.S. government shutdown helped support the dollar. The Senate’s passage of a funding bill, with expected House approval later in the day, reduced fiscal uncertainty and provided a temporary lift to the Greenback. However, weakening labor data continues to counter that strength. The ADP report showed an average of 11,250 job losses per week in October, underscoring a cooling jobs market. The CME FedWatch Tool now shows a 68% probability of a 25-basis-point cut in December, suggesting that easing expectations may soon weigh on the dollar again.

Technical crossroads ahead

EUR/USD now trades between the 1.153–1.162 range, a pivotal zone that will determine short-term direction. A decisive break above 1.165 could unlock upside toward 1.172 and 1.18, while failure to defend 1.1530 risks pulling the pair back toward 1.14. The interplay between Fed expectations and ECB stability will likely dictate which side gains control.

Earlier discussions highlighted 1.153 as a crucial support defining the euro’s near-term outlook. That level continues to anchor the pair’s structure. A sustained hold here, combined with dovish U.S. data, could shift momentum in favor of the euro heading into late November. Conversely, renewed dollar demand from stronger U.S. numbers would likely test this floor again.

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