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【XM Market Analysis】--EUR/USD Analysis: Bearish Bias as Markets Eye US Shutdown
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Hello everyone, today XM Forex will bring you "【XM Market Analysis】--EUR/USD Analysis: Bearish Bias as Markets Eye US Shutdown". I hope it will be helpful to you! The original content is as follows:
EUR/USD Analysis Summary Today
- Overall Trend: : Bearish
- Support Levels for EUR/USD Today: 1.1520 – 1.1460 – 1.1390
- Resistance Levels for EUR/USD Today: 1.1610 – 1.1690 – 1.1770

EUR/USD Trading Signals:
- Buy EUR/USD from the support level of 1.1480 with a target of 1.1700 and a stop-loss at 1.1400.
- Sell EUR/USD from the resistance level of 1.1700 with a target of 1.1500 and a stop-loss at 1.1780.
Technical Analysis of EUR/USD Today:
The ongoing US government shutdown and the pergent market expectations for the future policies of the US Federal Reserve continue to heavily influence the trajectory of the US Dollar against other major currencies, as well as the rest of the global financial markets. The US government shutdown is preventing the release of US jobs figures, which are the most important economic data affecting market expectations for the future of Federal Reserve policy. In addition to that report, US inflation readings are due to be announced this week.
Prior to that, the EUR/USD pair attempted to recover from its three-month lows when it plunged to the 1.1468 support level last week, but the cautious upward rebound gains did not exceed the 1.1592 resistance level before closing the week stabilized around the 1.1560 level.
Will the EUR/USD pair fall to the 1.1400 support level?
According to Forex currency trading experts' forecasts, the bearish outlook for the EUR/USD pair was confirmed by its stabilization below the 1.1600 support. As I mentioned before, this opens the door for further downward pressure on the currency pair, which has happened. The continuation of the bearish outlook does not rule out a drop to the 1.1400 support level, especially since the technical indicators, which have turned bearish, have room to move downward before reaching the oversold zone. Currently, the 14-day Relative Strength Index (RSI) is around a reading of 44, below the neutral line, and at the same time, the MACD indicator lines are steadily leaning downward.
Conversely, on the same timeframe, the daily chart indicates a strong bullish scenario for the EUR/USD pair, requiring a move towards the psychological resistance level of 1.1800. Today's EUR/USD trading is not focused on any major US economic releases; the only anticipated indicator is the Sentix Eurozone Consumer Confidence Index, due at 11:30 AM Cairo time.
Trading Tips:
The EUR/USD gains will remain vulnerable to rapid collapse until investor confidence returns to the market, which could happen with the end of the US government shutdown.
The future of US central bank policy is becoming increasingly uncertain.
The prospects for US monetary policy remained ambiguous following the recent wave of statements from Federal Reserve officials. Divisions among Fed policymakers persisted in the wake of last Wednesday's US interest rate cut, raising doubts about their ability to agree on another cut at their anticipated meeting on December 9-10. While some officials openly supported further monetary easing, others expressed reluctance, if not opposition, to cutting US interest rates again next month.
In short, the overall tone of official statements on Thursday and earlier this week reinforced Federal Reserve Chair Jerome Powell's assertion that a December US interest rate cut is "not a given."
John Williams, President of the New York Fed, one of Powell's most prominent aides as Vice Chair of the policy-making FOMC, had been supportive of policy easing in recent weeks to address labor market weakness, but last Thursday he limited his www.xmcnbrokers.comments to saying the bank must adhere to its 2% inflation target and strive for "price stability."
Meanwhile, Austin Goolsbee, president of the Federal Reserve Bank of Chicago, who voted for rate cuts in September and October, appeared less insistent on another rate cut on Thursday, particularly given the lack of economic data from the closed federal government. He saw “stabilization” in the labor market and expressed deep concern about inflation in the absence of statistics. Meanwhile, Beth Hammack, president of the Federal Reserve Bank of Cleveland, who will join the Federal Open Market www.xmcnbrokers.committee (FOMC) voting line next year, was more vocal in her opposition to another near-term rate cut, arguing that inflation is a greater concern than the struggling labor market and emphasizing the need for monetary policy to remain “in a fairly restrictive position to achieve the right balance of our objectives.”
Overall, for the second consecutive meeting, the FOMC lowered the US interest rate by 25 basis points on October 29 to a target range of 3.75% to 4.0%. However, in an unusually split decision, Federal Reserve Governor Stephen Miran opposed a 50-basis point cut, while Kansas City Fed President Jeffrey Schmid opposed the decision, favoring keeping rates unchanged.
In addition to this easing move, the FOMC moved faster than many expected to halt "quantitative tightening" by the end of this month. The FOMC had cut the interest rate by the same amount on September 17 to a target range of 4.0% to 4.25%. In its revised Summary of Economic Projections, published in September, FOMC participants anticipated another 25 basis points of monetary easing at the www.xmcnbrokers.committee's final meeting in 2025.
Despite 25 basis points remaining in the September "dot plot," Powell stressed in his October 29 press conference that a rate cut on December 9-10 "is not a foregone conclusion, far from it." He noted "sharp differences in views on how to proceed in December." He added that the FOMC has cut the federal funds rate by 150 basis points since it began easing monetary policy in September 2024, making policy now "150 basis points closer to neutral." He added that this prompts some officials to "pause" and "wait" before easing policy further, while others wish to "move forward" with more easing.
Powell said the FOMC "will resume monetary easing at some point," but added that it is trying to deal with a "difficult" and "complex" situation that requires "balancing" the two-sided risks—either in favor of inflation or in favor of jobs. In this climate, he said it is appropriate to be "cautious." He added that if there is a "high degree of uncertainty" on December 10, "that might justify caution about moving."
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