EUR/USD Holds Near 1.1489 as ECB Pushes Digital Euro Plans and Dollar Strengthens

Final October PMI readings are due today. Forecasts suggest France’s services index may rise from 46.5 to 47.1 points, Italy’s from 52.5 to 53.0, and Germany’s from 51.5 to 54.5, which could lift the composite figure from 52.0 to 53.8. Overall eurozone services activity may strengthen from 51.2 to 52.6, while the S&P Global composite index is expected to improve from 51.2 to 52.2. Combined with recent positive data from the manufacturing sector, the bloc’s economy looks stable — and if inflation remains subdued, the European Central Bank (ECB) will likely maintain its current rate policy without major risks.

Meanwhile, ECB President Christine Lagarde announced plans to accelerate the launch of a central bank digital currency (CBDC), calling it a “symbol of faith in our shared future.” The Governing Council confirmed the transition to the development stage for the digital euro’s technical infrastructure, targeting a 2029 rollout, pending EU legislative approval. However, the move has drawn criticism from the crypto community, which argues that CBDCs contradict the principles of financial independence and may increase state control over private transactions.

At the same time, the U.S. dollar remains volatile: the USDX trades near 99.90 with a chance to test the July high at 100.00. Despite the ongoing government shutdown, some macroeconomic data may still be released. At 15:15 (GMT+2), the ADP nonfarm employment report is expected to show a gain of 32,000 jobs after a similar drop a month earlier. The key uncertainty for the greenback remains the Fed’s next move — Chair Jerome Powell recently reiterated that no decision has been made regarding a December rate cut, and officials appear inclined to pause policy changes. Still, the CME Group’s FedWatch Tool estimates the odds of a 25 bps reduction at 74.1%.

Support and Resistance Levels

On the daily chart, the pair continues to correct lower, moving away from the lower boundary of the ascending channel between 1.2000 and 1.1750.

Technical indicators maintain a bearish bias: the fast EMAs on the Alligator indicator remain below the signal line and are widening their spread, while the AO histogram continues to print red bars within the sell zone.

Support levels: 1.1400, 1.1080.

Resistance levels: 1.1560, 1.1810.

EUR/USD Trading Scenarios and Forecast

If the decline continues and the price consolidates below 1.1400, short positions may be opened targeting 1.1080, with a stop-loss at 1.1500. Estimated duration: 7+ days.

If the price breaks and holds above 1.1560, long positions targeting 1.1810 will become relevant, with a stop-loss at 1.1450.