EUR/USD Update: Market Movements
The EUR/USD has retraced from a trading peak of about 1.1525, following an unexpected dip in euro area retail sales. Currently, it’s trading at 1.1515. The market did experience a recovery from a three-month low earlier in the week, largely influenced by easing concerns surrounding the U.S. tech sector and more favorable European corporate earnings, which helped boost overall market sentiment.
According to Eurostat, retail sales in the Eurozone dropped by 0.1% in September, contrary to predictions of a 0.2% increase. Additionally, the previous month’s August sales were revised down to a 0.1% decline. Year-on-year, retail consumption grew at a rate of 1%, which is a decrease from the 1.6% recorded in August.
These figures could dampen the euro’s recovery efforts—especially with the recent upbeat U.S. employment and service activity data casting doubt on the potential for a Federal Reserve rate cut in December, which offers support to the U.S. dollar.
Moving forward, market attention is turning towards various comments from Federal Reserve representatives, which will be critical to watch in light of the recent positive surprises from the ADP jobs report.
Market Overview: Increased Risk Appetite
- The euro has regained some ground as risk appetite increases, pushing stock markets upward once again. However, significant recovery may not be sustainable as robust U.S. economic data continues to strengthen the case for Federal Reserve hawks, bolstering the dollar.
- Wednesday’s U.S. data exceeded expectations, resulting in improved investor sentiment. The ADP employment change for October showed an increase of 42,000 jobs, following a revision of 29,000 positions added in September, which surpassed the anticipated growth of 25,000.
- The ISM Services Purchasing Managers Index for the U.S. demonstrated stronger business activity than expected, rising to 52.4 in October from 50.0 in the prior month, exceeding the forecast of 50.8. New orders also saw an uptick, moving from 50.4 to 56.2.
- Expectations for a December rate cut by the Federal Reserve dipped to 62% from 68% earlier this week. This figure had previously been over 90% before last week’s monetary policy meeting.
- On Wednesday, the final Eurozone HCOB services PMI for October recorded a rise to 53.0, an increase from 51.3 the month before, surpassing an initial estimate of 52.6.
- Predictions indicate that European corporations could see an average profit growth of 4.3% in the third quarter, according to data from LSEG, which is significantly higher than market analysts’ forecast of 0.4% growth.
Technical Analysis: EUR/USD Trends
The EUR/USD pair experienced further gains on Thursday, moving away from the mid-term low of around 1.1470 hit earlier this week. The 4-hour moving average convergence divergence (MACD) has moved above the signal line, while the relative strength index (RSI) is testing the critical 50 mark. This suggests a potentially bullish correction might be in sight, following a significant decline of nearly 1.5% from last week.
However, bullish momentum may face substantial resistance at the previous support zone near 1.1545, with a further challenge at around 1.1580—levels recorded on October 22 and 23—before hitting the October 30 high of 1.1635.
On the downside, immediate support is positioned at 1.1470, a level of concern seen on Tuesday and Wednesday. Additional support levels include a measured target stemming from a broken triangle pattern around the 261.8% Fibonacci retracement, likely near 1.1440. The low from August hovers around 1.1390.
Economic Indicators: Retail Sales Insights
Latest retail sales information released by Eurostat provides insights into month-over-month changes in the Eurozone’s retail sector, reflecting about 5% of the overall economic contribution. This data, often serving as an indicator of consumer spending, shows the percentage change compared to the previous month. Generally, any increase in sales is viewed positively for the euro, whereas declines tend to spook traders.
Final release: Thursday, November 6, 2025 at 10:00
Frequency: Monthly
Actual: -0.1%
Consensus: 0.2%
Previous: 0.1%
