## EUR/USD Stuck at 1.16, Fed Rate Cut Expectations vs. Economic Data Tug-of-War

**Euro Weakness Pressure Unresolved, Market Bets on Fed "Dove" in December**

EUR/USD has recently shown an interesting pattern — it was expected to weaken due to strong employment data but instead rose for two consecutive days. As of writing, the pair is trading at 1.1595, up 0.22%, rebounding from the intraday low of 1.1547. The logic behind this is simple: traders’ confidence in a December rate cut by the Fed remains steady at 85%, enough to offset the "good news" from US economic data.

## Mixed Economic Data, but Dovish Expectations Dominate

Initial jobless claims fell again to 216,000 (below the expected 225,000), while continuing claims rose to 1.96 million. These figures reveal a complex signal in the labor market: layoffs are not widespread, but hiring is slowing down.

At the same time, September durable goods orders showed mixed results — a mere 0.5% month-over-month increase, well below August’s strong 2.9%, indicating a slowdown in manufacturing momentum. Nonetheless, the data still beat expectations of 0.3%, with core orders outperforming at 0.9%.

Fed officials’ attitudes are even more critical. On the European side, Vice President de Guindos states that the current interest rate level is appropriate, while Chief Economist Ryan emphasizes the need to observe further easing of non-energy inflation, implying that additional rate cuts require clear signals. In contrast, market expectations for a "dove" Fed are much stronger — CME tools show an 85% probability of a 25 basis point rate cut in December.

## Dollar Under Pressure, Euro Gets a Breather

The US Dollar Index (DXY), tracking the dollar against six major currencies, fell 0.21% to 99.57, reflecting ongoing dollar suppression due to Fed rate cut expectations. Concerns about euro depreciation have temporarily taken a backseat in the face of rate cut expectations.

## Technical Outlook: EUR/USD at a Crossroads

From the chart, EUR/USD has broken above the 20-day simple moving average (1.1556), but faces weak buying interest at the 1.1600 level. The Relative Strength Index (RSI) indicates momentum is somewhat optimistic but flat, suggesting a consolidation phase ahead.

On the upside, a break above 1.1600 with the 50-day and 100-day moving averages converging at 1.1631/1.1646 will be a key resistance, followed by the 1.1700 level. On the downside, a fall below 1.1550 would target the next support at 1.1500, with further weakness facing support near 1.1468 and the 200-day moving average (around 1.1426).

**The key focus is on the December Fed decision — if a rate cut materializes, euro depreciation pressure may ease; if the decision leans hawkish, EUR/USD could face downward correction.**