EUR/USD Climbs as U.S. Shutdown Hopes Boost Risk Appetite
During Monday’s European session, EUR/USD reversed earlier losses and climbed above the 1.1550 level. The euro recovered ground as investor risk appetite improved, driven by signs that the U.S. government shutdown might end soon reducing demand for the safe-haven U.S. dollar.
Underlying the move is the broad market shift: after weeks of uncertainty, the U.S. Senate advanced a bill to temporarily fund the government, raising expectations that federal workers will soon receive back pay, and that economic data flows may resume. This development has lightened the shadow over markets previously cast by the shutdown’s data blackout.
On the fundamentals side, the eurozone remains under pressure: upcoming Sentix investor-confidence data and industrial-production figures will be closely monitored for signs of economic health, even as the euro benefits from the dollar’s slip. Meanwhile, comments from European Central Bank Vice-President Luis de Guindos reinforced that current interest-rate levels are “appropriate” for now, supporting the view that the ECB may stay on hold.
Eyeing Resistance Near 1.1570 to 1.1630
Technically, EUR/USD is showing signs of a modest recovery. The pair is trading above the 20- and 50-period simple moving averages on the 4-hour chart, while the Relative Strength Index (RSI) edges toward 60, indicating reduced selling pressure.
On the upside, initial resistance lies at roughly 1.1570 (the 23.6 % Fibonacci retracement), with further barriers near 1.1590 (100-period SMA) and 1.1630 (200-period SMA / 38.2 % retracement). On the downside, support is present around 1.1540-1.1530 (aligned with the 50 and 20 SMAs), then deeper at 1.1500 and 1.1450 if risk sentiment reverses.
Data Flow and Policy Messaging
With the dollar under pressure from improving risk sentiment, markets are shifting their focus back to data. If the U.S. government reopens and statistical releases resume, it could bolster the dollar once more and challenge the euro’s modest advance. Conversely, weak eurozone numbers could undermine EUR/USD despite the current rebound.
In summary, EUR/USD’s climb above 1.1550 reflects a market adapting to reduced U.S. uncertainty. However, the pair remains vulnerable to both eurozone data disappointments and any renewed dollar strength. Traders would do well to watch the 1.1570-1.1630 resistance zone and the 1.1500 support threshold as sentiment and policy evolve.
