The outlook for EUR/USD is currently focused on the potential US government shutdown as the pair trades around 1.1750, marking gains for the second consecutive day. The Euro is appreciating due to a weakening US Dollar. In Washington, leaders continue to debate a funding bill, and without an agreement by Wednesday night, the US government may shut down. This possibility is causing unease in the markets. A shutdown would halt many government operations and could delay important economic reports. One major concern is the Nonfarm Payrolls (NFP) jobs report scheduled for Friday, which experts warn may be postponed, increasing uncertainty and adding to the FX risks associated with US debt and the shutdown.
Traders rely on this report to anticipate the Federal Reserve’s future actions, so a delay could lead investors to adopt a risk-averse stance, resulting in increased market volatility globally. Meanwhile, European economic data offers some reassurance for the Euro. This week, German and Eurozone inflation figures will be released, and the EU’s September Economic Sentiment Indicator has shown a slight improvement, rising to 95.5. These updates will influence the EUR/USD price forecast in the context of a potential shutdown, as investors assess European resilience against US instability. Technically, EUR/USD appears neutral but slightly optimistic in the short term. The price struggles to surpass its 100 SMA while finding support near the 200 SMA at 1.1690.
Indicators suggest that while buyers are present, their confidence is tempered by the uncertain political and economic landscape in the US. In conclusion, the potential impact of a US government shutdown on the Dollar remains the central theme. Should the shutdown happen and key data be delayed, the Euro may gain further strength against the Dollar. Nonetheless, investors remain cautious until US fiscal negotiations and European inflation data provide a clearer direction.