Macro Overview
Recent U.S. labour market data continues to reveal signs of gradual cooling, underscoring a slowdown in hiring momentum despite modest gains in job openings. The JOLTS report showed vacancies rising slightly from 7.21 million to 7.23 million in August, but a deeper breakdown highlighted a drop in the hiring rate to 3.2% the lowest level since June 2024. Layoffs, meanwhile, remained relatively stable, suggesting that employers are cautious but not yet moving toward large-scale reductions.
Complementing these figures, Challenger, Gray & Christmas reported that U.S. employers announced 54,064 job cuts in September, significantly below August’s 85,979. According to SVP Andy Challenger, the market now faces “a stagnant labour environment, rising operational costs, and the rapid onset of transformative technologies.”
In the policy sphere, the U.S. Supreme Court rejected former President Donald Trump’s appeal to remove Fed Governor Lisa Cook, allowing her to continue serving until at least January, when formal hearings are expected. The decision adds a layer of institutional stability at a time when monetary policy direction remains in focus.
Fed Commentary and Market Implications
Monetary policymakers remain split in tone. Dallas Fed President Lorie Logan struck a hawkish note, arguing that inflation remains above the Fed’s target, though she acknowledged growing labour market risks. Meanwhile, Chicago Fed President Austan Goolsbee emphasized that the absence of fresh data will force the Fed to rely on current trends when shaping near-term decisions.
Together, these remarks reinforce expectations that the Federal Reserve will proceed cautiously with rate cuts through the remainder of 2025, balancing inflation control against an evident softening in employment.
Adding to near-term uncertainty, the Nonfarm Payrolls report is expected to be delayed, leaving traders to rely on ISM Services PMI data for short-term direction. Fed officials’ remarks will likely continue to dominate headlines in the interim, influencing USD volatility.
European Developments
Across the Eurozone, headline inflation accelerated to 2.2%, while core CPI held steady at 2.3% for a fifth consecutive month signalling sticky underlying price pressures. Meanwhile, Eurostat data showed unemployment ticking up to 6.3% in August from 6.2%, missing expectations for stability.
ECB Governing Council member Martins Kazaks reiterated that current policy settings are appropriate, adding that further action would depend on new shocks or data surprises. However, political uncertainty in France, where Prime Minister Lecornu’s budget faces limited progress and union protests intensify, continues to weigh on regional sentiment and may restrict EUR upside potential.
Technical Analysis
The EUR/USD pair maintains a bearish structure on the 4-hour chart, characterized by a sequence of lower highs and lower lows. Price has repeatedly encountered selling pressure near the 100-period moving average, currently at 1.1752, reinforcing this level as local resistance.
A decisive close below the 200-period MA (1.1711) would likely accelerate downside momentum, exposing the 100% Fibonacci expansion target at 1.1608, which also aligns with a key horizontal support zone — a logical initial objective for short positions.
The Relative Strength Index (RSI) sits near 43, indicating neutral momentum but leaving room for further downside extension. Conversely, a strong recovery with a close above the recent swing high would invalidate the bearish setup and potentially signal the beginning of a bullish reversal.
Trade Setup
📉 Trading Direction: Sell (Bearish Bias)
🔹 Entry Price: 1.1752
🎯 Target Price: 1.1610
🛑 Stop Loss: 1.1815
⏰ Validity: October 10, 2025 – 15:00 GMT
Trade Insight: As long as EUR/USD remains capped below 1.1750, bearish momentum is favoured. A break beneath 1.1710 could confirm continuation toward 1.1610. Conversely, sustained strength above 1.1815 would invalidate the setup, shifting the outlook toward consolidation or reversal.
Market Outlook
The euro’s near-term prospects remain under pressure, as U.S. data softness supports a controlled Fed easing path, while Eurozone fundamentals show limited growth traction. With the pair trading below major moving averages and sentiment tilting negative, a bearish leg from local resistance appears increasingly likely.
Until clear bullish confirmation emerges, rallies toward 1.1750–1.1780 are expected to attract renewed selling, keeping downside risks in focus heading into next week.
