NextFin news, On Friday, October 3, 2025, during the European trading session, the EUR/USD currency pair consolidated near $1.1735 following two days of declines. This movement occurred as traders awaited critical Eurozone economic data, including the HCOB Purchasing Managers’ Index (PMI) for the Eurozone and Germany, as well as the Producer Price Index (PPI), which are key indicators for the European Central Bank's (ECB) monetary policy decisions.
The ECB's Martins Kazaks stated that current interest rates are "very appropriate" and suggested that rates could remain unchanged for the time being. He emphasized a flexible approach amid ongoing market uncertainty, indicating that the ECB would adopt a wait-and-see stance rather than rushing into further tightening measures. Kazaks' comments reinforced expectations that the ECB prioritizes stability until clearer economic signals emerge.
Meanwhile, the US dollar faced downward pressure as the government shutdown entered its third day, delaying the release of important economic data such as Nonfarm Payrolls (NFP), ISM Services PMI, and S&P Global Services PMI. This data vacuum has fueled speculation of a dovish Federal Reserve, with markets pricing in a 97% chance of an October rate cut and a 91% chance of another cut in December, according to CME FedWatch. These expectations are driven by concerns over a weakening US labor market and slowing economic growth.
Technically, the EUR/USD pair is trading within a symmetrical triangle pattern, indicating market indecision. Key support is identified at $1.1715, while resistance is at $1.1770. The price hovered between the 50-day and 100-day simple moving averages (SMAs), with candlestick patterns such as doji and spinning tops reflecting a tug of war between buyers and sellers. The Relative Strength Index (RSI) stood at 52, signaling a neutral to slightly bullish momentum. A confirmed break above $1.1770 could lead to gains toward $1.1819 and $1.1873, whereas a drop below $1.1715 might push the pair down to $1.1683 and $1.1646.
Eurozone economic data released on the day showed a mixed but broadly resilient picture. The services sector outperformed expectations in Spain and Italy, while Germany showed moderate growth and France experienced contraction. The Composite PMI for September reached 51.2, the highest since May 2024, suggesting steady momentum heading into the fourth quarter. However, the Eurozone unemployment rate ticked up to 6.3% in August. Hamburg Commercial Bank economist Dr. Cyrus de la Rubia noted that the service sector is running more smoothly with moderately robust growth in key economies.
On the US side, labor market concerns deepened as Challenger Job Cuts data showed a decline in layoffs for September, but hiring plans fell to their lowest level since 2009. The ongoing government shutdown has added to economic uncertainty, with President Donald Trump freezing $26 billion in funds for Democratic-leaning states and a delayed Senate vote complicating the fiscal outlook.
Market sentiment remained cautiously positive, with US equities near record highs and Treasury yields steady at 4.1%. However, the political uncertainty and data delays continue to weigh on the US dollar.
Investors are closely watching the upcoming US ISM Services PMI data for September, which is expected to show stable momentum in the services industry. Given the absence of the NFP report due to the shutdown, this data will be particularly influential in shaping market expectations for the Federal Reserve's next moves.
In summary, on Friday, October 3, 2025, the EUR/USD pair consolidated near $1.1735 amid a complex backdrop of a US government shutdown fueling expectations of Federal Reserve rate cuts, while the ECB maintained a steady policy stance pending clearer economic signals from the Eurozone.
Sources: FX Leaders (https://www.fxleaders.com/news/2025/10/03/eur-usd-forecast-euro-consolidates-as-us-shutdown-fuels-fed-cut-bets-ecb-stays-steady/), Forex Crunch, FXStreet
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