EUR/USD Holds Near 1.16 as U.S. Shutdown Ends, Dollar Steadies

The EUR/USD pair held steady near 1.1590 in early Asian trading on Thursday, as the U.S. Dollar stabilized following the official end of the record 43-day U.S. government shutdown. U.S. President Donald Trump’s signing of the funding bill late Wednesday restored government operations, easing short-term political uncertainty but leaving broader economic questions unresolved.

The pair’s limited movement came after six consecutive sessions of gains, signaling consolidation rather than renewed momentum. On the four-hour chart, EUR/USD trades around 1.1576, with the 20-period Simple Moving Average (SMA) positioned at 1.1560 and the 100-period SMA at 1.1575, both acting as near-term support levels. Meanwhile, the 200-period SMA at 1.1619 provides a dynamic resistance zone, containing upside attempts for now.

Momentum indicators also suggest a neutral tone. The RSI hovers at 55.9, while the Momentum Index cools within positive territory, showing fading bullish strength.

Key short-term technical highlights:

• Support levels: 1.1560 (20-SMA), 1.1575 (100-SMA)
• Resistance: 1.1619 (200-SMA)
• RSI at 55.9 signals neutral-to-mild bullish bias

Fed Outlook and Rate Cut Speculation

Market attention now turns to upcoming remarks from Federal Reserve officials, which could offer clues on future monetary policy direction. Recent U.S. labor data, including softer employment figures, have renewed speculation that the Fed may cut rates in December, despite earlier denials from Chair Jerome Powell following the October meeting.

While the shutdown’s economic impact is yet to be fully reflected in official data, analysts expect subdued readings for October and November, potentially reinforcing dovish sentiment. A prolonged period of muted growth could support a weaker dollar and boost the euro in the medium term.

Market Sentiment Remains Positive

Global risk appetite showed resilience despite political turbulence. Asian and European stock indexes traded higher, and Wall Street hovered near weekly highs, reflecting investor optimism that the reopening of the U.S. government will stabilize data flow and restore business confidence.

In the daily chart, the 20-day SMA caps upside momentum near 1.1665, while the RSI trends modestly lower around 46, hinting at a mild negative bias. Traders now await upcoming U.S. economic releases and central bank commentary to determine whether EUR/USD can sustain its current range or break decisively above the 1.16 barrier.

With market volatility easing, EUR/USD remains caught between steady dollar demand and cautious optimism over Europe’s growth outlook—setting the stage for a pivotal few sessions ahead.