EUR/USD Forecast: Euro Rises Ahead of Eurozone PMI and Fed Outlook

The ongoing U.S. government shutdown has led to the cancellation of several key publications, while in the eurozone, S&P Global and Hamburg Commercial Bank (HCOB) will release October business activity data on Friday at 10:00 (GMT+2). Forecasts suggest that France’s manufacturing PMI will edge up from 48.2 to 48.3, while the services PMI will slightly fall from 48.5 to 48.4. In Germany, the indicators are expected to stand at 49.5 and drop from 51.5 to 51.0 respectively. Across the eurozone, a minor decline is expected — from 49.8 to 49.5 for manufacturing and from 51.3 to 51.1 for services. Meanwhile, France’s domestic political environment remains unstable amid strong parliamentary divisions as lawmakers negotiate the new fiscal budget.

Prime Minister Sébastien Lecornu managed to finalize government formation and avoid two no-confidence votes through an alliance with the Socialists, but upcoming budget debates promise to be tense. President Emmanuel Macron has ruled out resignation, though such a move could potentially shift public sentiment. The U.S. dollar remains under pressure as investors anticipate monetary policy easing by the Federal Reserve, potentially at the October meeting, with another rate cut possible in December. Markets are also monitoring the unresolved government shutdown, now in its third week. The Senate has rejected a temporary funding bill for the 11th consecutive time, with only 50 of the 60 required votes in favor.

Support and Resistance Levels

Bollinger Bands on the daily chart are showing a moderate decline, with narrowing price range indicating mixed short-term sentiment. The MACD is turning bearish, forming a new sell signal as the histogram moves below the signal line. The Stochastic indicator also signals a downward reversal after a rebound early this week.

Resistance levels: 1.1629, 1.1700, 1.1754, 1.1800.

Support levels: 1.1541, 1.1500, 1.1450, 1.1400.

Trading Scenarios and EUR/USD Forecast

Short positions may be opened after a confident breakout below 1.1541, targeting 1.1400. Stop-loss — 1.1600. Implementation time: 2–3 days.

A return to bullish momentum with a breakout above 1.1629 could signal new long positions targeting 1.1754. Stop-loss — 1.1560.