Slowing U.S. Growth Put Spotlight on CPI as EURUSD

Weak PMI data, softening jobs market, and political brouhaha raise the stakes for October’s inflation print. The U.S. government shutdown has frozen parts of federal spending and triggered fresh issues in markets, just as investors prepare for next week’s Core CPI release on October 15. The euro-dollar pair has held near 1.174, holding on between a slowing U.S. economy and Europe’s cautious stability.

Recent data show problems in U.S. momentum; ISM manufacturing and services PMIs slipped closer to reduction, while jobless claims continue to go higher, signaling a softer labor market. Treasury yields hover near 4.1%, and traders are increasingly questioning whether the Federal Reserve can maintain its “higher for longer” position.

Meanwhile, the European Central Bank has kept policy steady, emphasizing inflation is returning toward target. With no imminent rate cuts expected in the eurozone, the near-term direction for EURUSD will largely depend on U.S. data and political developments.

Next week’s CPI release now carries outsized weight. A hotter reading could revive bets on extended Fed tightening and drive EURUSD below the 1.165 level, while a softer print would reinforce expectations of early rate cuts and send the pair back toward 1.19 or even 1.20.

Until then, you should expect short term volatility spikes tied to government funding headlines and bond yield swings. The combination of weak U.S. data and political uncertainty has made EURUSD one of the most sensitive currency pairs heading into mid October.

EURUSD Long Term Technical Analysis, October 2025

As of October 5, 2025, the EURUSD pair is trading near 1.174 - a period of consolidation following a significant rally earlier in the year. Here we have factors heavily affecting price movement:

• U.S. Federal Reserve's Monetary Policy: Recent interest rate cuts have introduced a bearish bias for the U.S. dollar. The Fed's dovish stance, coupled with concerns over fiscal deficits and political instability, has led to a decline in the dollar's value, approximately 10% year-to-date.
• Eurozone Economic Stability: The European Central Bank (ECB) has maintained a steady policy approach, with inflation approaching target levels and no immediate plans for rate cuts. This stability has provided support for the euro.
• U.S. Government Shutdown: The ongoing partial government shutdown has added uncertainty to the U.S. economic outlook, further pressuring the dollar.

EURUSD Technical Indicators and Chart Patterns

Resistance Levels: The EUR/USD pair faces significant resistance around the 1.1917 level, with a key psychological barrier at 1.2000. A sustained break above these levels could signal a continuation of the bullish trend.

Support Levels: On the downside, support is observed near 1.1644, with a critical level at 1.1390. A break below 1.1390 would suggest a potential reversal of the current uptrend.

Moving Averages: The 55-day Exponential Moving Average (EMA) is currently at 1.1670, serving as a dynamic support level. A sustained move below this level could indicate weakening bullish momentum.

MACD Divergence: The daily MACD shows bearish divergence, suggesting that upward momentum may be losing strength.

The EURUSD is expected to trade within a range of 1.1644 to 1.1917 in the near term. A breakout above 1.1917 could lead to a test of the 1.2000 level, while a decline below 1.1644 may open the door for a move towards 1.1390.

Analysts project a gradual appreciation of the euro against the dollar, with forecasts suggesting a rise to approximately 1.19 by the end of 2025.

If we look further ahead, some forecasts indicate potential for the EUR/USD pair to reach 1.22 by March 2026, driven by continued U.S. economic moderation and ECB policy stability.

Bottom Line EURUSD

The EURUSD is currently in a consolidation phase, balancing between bullish momentum and technical resistance. You should watch key levels at 1.1644, 1.1917, and 1.2000 for potential breakout or reversal signals. Also keeping an eye on U.S. economic data, Federal Reserve policy decisions, and geopolitical news will be crucial for understanding the EURUSD long term trend.