EURUSD on Friday dropped -0.6% to 1.09739. Week ending 2024-10-04 moved lower by -1.75%. What you need to know.

EURUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.6%	-66.1 Pips
Week 2024-10-04	-1.75%	-195.9 Pips
October	-1.46%	-162.7 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM CPI Inflation Rate (12-mth)
Fri 01:30 PM Producer Price Index (12-mth)

What happened over the week

In the United States, recent economic indicators demonstrate a complex labor market scenario. The unemployment rate saw a marginal improvement, decreasing to 4.1% in September from 4.2% in August, as reported by the Bureau of Labor Statistics. Nonfarm payroll employment also experienced a significant rise, reaching 254,000, an increase from the revised previous figure of 159,000. Nevertheless, the average hourly earnings experienced a slight reduction in growth over a one-month period, falling to 0.4% in September from 0.5% in August, though over the 12-month period, it increased modestly to 4% from 3.9%. Additionally, initial unemployment claims marginally rose to 225,000 for the week ending 28 September, compared to the revised figure of 219,000. Meanwhile, U.S. new orders for manufactured goods witnessed a reduction of 0.2% in August compared to a 4.9% increase in July.

In the Euro Area, the economic indicators for August and September highlighted a slight deflationary trend. The Euro Area Producer Price Index (PPI) decreased consistently, falling to -2.3% from a previously revised figure of -2.2% in July, according to Eurostat. Furthermore, the Eurostat data indicated that the Euro Area unemployment rate remained constant at 6.4% in August. On the consumer price index front, the region saw a decrease in the Core Harmonised Index of Consumer Prices (HICP) to 2.7% from 2.8% the previous month, and the monthly HICP dropped to -0.1% in September, a decrease from 0.1% in August. Notably, Germany’s HICP for September also showed a deceleration, dropping to 1.8% from 2% in August, as reported by Destatis.

The EURUSD pair closed the week with a notable decline of 1.75%, settling at 1.09739 by the end of Friday, losing 0.6% on that day. The recent U.S. labor market improvements along with the mixed data from the Euro Area might contribute to the weakening of the euro against the dollar. U.S. labor market strength and potential inflationary pressures could increase the likelihood of more aggressive policy measures by the Federal Reserve in upcoming meetings. This might support the dollar’s strength relative to the euro as markets anticipate upcoming economic data releases, such as the FOMC meeting minutes and significant inflation data in the U.S., which may further drive U.S. dollar volatility and weigh on the EURUSD currency pair. As always, market participants will be closely monitoring these developments.

From X (Twitter)

Euro area #inflation expected to be 1.8% in September 2024, down from 2.2% in August. Components: services +4.0%, food, alcohol & tobacco +2.4%, other goods +0.4%, energy -6.0% – flash estimate https://t.co/46bCOvZNMl pic.twitter.com/5q6vurCV9G

— EU_Eurostat (@EU_Eurostat) October 1, 2024

Payroll employment rises by 254,000 in September; unemployment rate changes little at 4.1% #JobsReport #BLSdata https://t.co/ZwrVfLviqL

— BLS-Labor Statistics (@BLS_gov) October 4, 2024

What can we expect from EURUSD for the new week and what happened on Friday?

EURUSD on Friday dropped -0.6% to 1.10. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2024-10-04, the pair dropped -1.75% or -195.9 pips lower.

Looking ahead, EURUSD looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook looks bearish, immediate support level is at 1.09 (WS1) with break below could see further selling pressure towards 1.08 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.11 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.10 would indicate selling pressure.

For the month of October, EURUSD is down by -1.46% or -162.7 pips lower.

Weekly key levels to watch out:

You might also be interested in:

Manufacturers’ Shipments, Inventories, and Orders Source: Census Bureau
In August 2024, manufacturing output increased sharply (+1.6 %) Source: INSEE
House prices up by 1.3% in the euro area Source: Eurostat
Industrial producer prices up by 0.6% in the euro area and by 0.4% in the EU Source: Eurostat
Personal Consumption Expenditures by State, 2023 Source: Bureau of Economic Analysis
Euro area unemployment at 6.4% Source: Eurostat
U.S. International Trade in Goods and Services Source: Census Bureau
Construction Spending Source: Census Bureau
Philip R. Lane: Expectations and Monetary Policy Source: European Central Bank
Euro area annual inflation down to 1.8% Source: Eurostat
Inflation rate in September 2024 expected to be +1.6% Source: Statistisches Bundesamt (Destatis)
Powell, Economic Outlook Source: Federal Reserve
U.S. International Trade in Goods and Services Source: Census Bureau